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Citizens Financial Group

Bruce Van Saun Citizens Financial Group, Inc. (CFG) provides Chairman and Chief Executive Officer, Citizens Financial primarily through the Citizens and Charter One brands. CFG is Group, Inc. engaged in retail and corporate banking activities through its branch network in 11 states in the United States and through non-branch offices in other states.

RBS disposed of 29.5% of its interest in Citizens Financial Group, Inc. during the second half of 2014 primarily through an in the USA.

Performance overview(1) • Average loans and advances were up 10% • Operating profit increased by $306 million, driven by the $3.4 billion transfer of assets or 32%, to $1,253 million, reflecting the from Non-Core, commercial loan growth, Q2 2014 gain on the sale of the auto loan organic growth and purchases franchise. The former Non-Core portfolio is of residential mortgages and auto loans, % now included and indirect expenses are which were partially offset by a reduction in 17 no longer allocated on a prospective basis home equity loans. from 1 January 2014. On a comparable • Average customer deposits were down basis, operating profit excluding the 2% with planned run-off of high priced impact of the Illinois sale, $283 million net deposits. gain, and restructuring costs, $169 million (2013 - $24 million), was up 16% driven Building a better that serves customers well Contribution by an increase in net interest income and The initial public offering of CFG was to income a decrease in impairment losses partially offset by lower non-interest income. successfully completed in September 2014 • Net interest income was up $357 million, and RBS’s interest in CFG stood at 70.5% of or 12%, to $3,317 million driven by a larger shares outstanding at 31 December 2014. investment portfolio, loan growth including Further share sales are planned in 2015 and the transfer of assets from Non-Core, the RBS intends to fully divest the business by the benefit of interest rate swaps and deposit end of 2016. pricing discipline. • Excluding restructuring costs of Note: RBS disposed of 29.5% $169 million (2013 - $24 million), total (1) 2014 results are not directly comparable with prior of its interest in Citizens periods; prior year results exclude Non-Core operations expenses were down $96 million, or 3%, Financial Group, Inc. and include indirect expenses. In the context of the to $3,328 million driven by the removal of planned disposal of Citizens Financial Group, indirect during the second half expenses are no longer allocated to the segment. indirect costs in 2014 and the impact of of 2014. the Illinois franchise sale partially offset by lower mortgage servicing rights impairment release and higher consumer regulatory compliance costs. 2016 Performance highlights 2014 2013 RBS intends to fully divest the business by the end Return on equity (%) 6.6 5.7 of 2016. Cost:income ratio (%) 69 74

Net loans and advances to 93.1 83.2 customers ($bn) Customer deposits excluding repos ($bn) 94.6 91.1

Loan:deposit ratio (%) 98 91 For further information 147 - 149 Risk-weighted assets ($bn) 106.8 92.8 see pages

Note: RWAs at 31 December 2013 are on Basel 2.5 basis and on the end-point CRR basis at 31 December 2014.