Corporate Banking in New Locations and Products in Asia and Middle East Slide 26 Summary

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Corporate Banking in New Locations and Products in Asia and Middle East Slide 26 Summary Make it happen strength diversity flexibility This presentation may contain forward looking statements, including such statements within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements concern or may affect future matters, such as the Group's economic results, business plans and strategies, and are based upon the current expectations of the directors. They are subject to a number of risks and uncertainties that might cause actual results and events to differ materially from the expectations expressed in or implied by such forward looking statements. Factors that could cause or contribute to differences in current expectations include, but are not limited to, regulatory developments, competitive conditions, technological developments and general economic conditions. These factors, risks and uncertainties are discussed in the Group's SEC filings. The Group assumes no responsibility to update any of the forward looking statements contained in this presentation. The information, statements and opinions contained in this presentation do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. The information contained in this presentation is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by the Group. Any person at any time acquiring the securities must do so only on the basis of such person’s own judgement as to the merits of the suitability of the securities for its purposes and only on such information as is contained in public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained herein. The information is not tailored for any particular investor and does not constitute individual investment advice. Information in this presentation relating to the price at which investments have been bought or sold in the past or the yield on investments cannot be relied upon as a guide to future performance. DrivingDriving GrowthGrowth SirSir FredFred GoodwinGoodwin GroupGroup ChiefChief ExecutiveExecutive Slide 4 EPS Growth Cumulative Growth in Earnings Per Share 200 180 160 140 120 100 2001 2005 2008 RBS excluding goodwill amortisation and integration costs, as reported (UK GAAP 2001-2004 and IFRS 2004-2005) Slide 5 EPS Growth Cumulative Growth in Earnings Per Share 200 180 160 % 10 GR 140 CA 120 100 2001 2005 2008 RBS excluding goodwill amortisation and integration costs, as reported (UK GAAP 2001-2004 and IFRS 2004-2005) Slide 6 EPS Growth Cumulative Growth in Earnings Per Share 200 180 160 % 10 GR 140 CA 120 100 2001 2005 2008 RBS excluding goodwill amortisation and integration costs, as reported (UK GAAP 2001-2004 and IFRS 2004-2005) Slide 7 Drivers of Growth ▮ Diversified income ▮ Scale and distribution ▮ Growing market share ▮ New products/new markets ▮ Operational excellence ▮ Strong risk management ▮ Financial strength Slide 8 Agenda Retail Markets Gordon Pell RBS Insurance Mark Fisher Ulster Bank Cormac McCarthy Coffee break Citizens Larry Fish Corporate Markets Johnny Cameron Financial Framework Guy Whittaker Closing remarks Sir Fred Goodwin Questions & Answers RetailRetail MarketsMarkets GordonGordon PellPell ChiefChief ExecutiveExecutive Slide 10 Diversified Income 1H06 Income £4,221m Merchant acquiring 4% Money transmission 13% Business deposits 8% Business lending 7% Overdrafts 8% Other 6% Personal loans 9% Other investment prods 6% Mortgages 7% Bancassurance 8% Credit cards 15% Personal savings 9% Slide 11 Scale Rank Personal current accounts #1= Personal savings #6 Personal loans #2 Credit cards #2 Mortgages #5= Business banking #1 Bancassurance #5 Merchant acquisition #1 Slide 12 Distribution ▮ 14.5 million personal banking customers ▮ 10.1 million UK credit card customers ▮ 1.2 million business customers (turnover <£1m) ▮ #1 UK-wide distribution network – 2,274 branches – 14,418 traditional and merchant fill ATMs – 2.3 million active internet users ▮ Comprehensive general and specialist sales forces – Personal: 5,758 – Business: 3,826 Slide 13 Market Share Share Trend Personal current accounts 21% Ò Personal savings 9% Ò Personal loans 16% Î Credit cards 16% Ò Mortgages 6% Î Business banking 25% Ô Bancassurance 9% Ò Merchant acquisition 42% Î Slide 14 Opportunities for Growth 12-24 Month Outlook Personal current accounts 9 Personal savings 99 Personal loans 9 Credit cards 9 Mortgages 99 Business banking 99 Bancassurance 999 Private banking – UK 999 Private banking – International 999 Slide 15 Personal Current Accounts 9 ▮ Achieved #1= market share – #1 for new business – #1 account ‘switchers’ – #1 for students – #1 for affluent customers ▮ Highest proportion of ‘extremely’ satisfied customers Business Priorities ▮ Maintain service primacy ▮ Grow RBS in England & Wales ▮ 30 branch openings, and upgrading 640 branches at £370m investment over 05-07 Slide 16 Personal Savings 99 ▮ 12% share of new business, v 9% share of stock ▮ Stable margins supported by service proposition Business Priorities ▮ Integrate further with current accounts and bancassurance as part of core offering ▮ Increasing use of structured savings products, with sales rising from £250m in 2005 to a target £600m in 2006 Slide 17 Current Accounts & Personal Savings 1H06 v 1H05 Ave Savings + MTA Balance Growth Balance Growth % 12 10.2 10 8.2 8 6 4 2 0 Market Retail Markets Source: Bank of England, Internal Data Slide 18 Unsecured Lending 9 Personal Loans Credit Cards ▮ Muted volumes ▮ Leading share of new cards issued ▮ Deliberately cautious view ▮ Focus on organic channels ▮ Focus on organic channels Partnership with Bank of Scaled back less profitable ▮ ▮ China direct lending Credit Quality ▮ Overall our credit metrics remain stable Slide 19 Mortgages 99 ▮ Single mortgage business created ▮ £66bn book ▮ Joint 5th largest player in the market ▮ Market share stable ▮ 2H06 new business in line with stock Business Priorities ▮ Major investment in branch process and sales force ▮ Broaden product offering Slide 20 Business Banking 99 ▮ Maintain #1 UK bank for SME’s ▮ Income £800m 1H06 (19% of total) ▮ Strong, stable credit quality ▮ New leadership team, senior transfer from Corporate Markets Business Priorities ▮ Re-energised relationship manager and direct delivery models ▮ Introduce proven products & sales technology from Corporate Markets Slide 21 Bancassurance 999 ▮ Fastest growing UK bancassurer ▮ APE in 1H06 +89% v 1H05 ▮ Increasing market share by c50% ▮ 15% increase in sales force combined with sales productivity gains of 50% v 2005 ▮ New business margins growing Business Priorities ▮ Further increase sales force by 50%+ to >1,000 in 2007 and continue to drive productivity gains ▮ Access new industry growth opportunities eg pensions Slide 22 Bancassurance APE Growth £m 32% 500 481 400 364 300 57% 89% 196 200 138 125 100 73 0 1H05 1H06 1H05 1H06 1H05 1H06 RBS Lloyds TSB HBOS Slide 23 Private Banking – UK 999 RBS and NatWest ▮ 500k customers, 1,000+ Relationship Managers ▮ #1 market share in current accounts for high earners – 25% of the £50k+ segment ▮ Income £340m 1H06 ▮ £6bn AUMs, balance sheet of £35bn (deposits + lending) Business Priorities ▮ Transformation of legacy Premium & Private Banking into NatWest and RBS Private Banking ▮ Launch new Private Banking Direct and 24/7 services ▮ Revamped product & service range eg exclusive savings and packaged accounts with tailored benefits Slide 24 Private Banking – UK 999 Coutts, Adam and RBS International ▮ Leading UK private banks – 69,000 clients, 365 bankers (39% increase since 2003), 28 offices (3 new in 06/1Q07) ▮ Largest offshore bank – 163,000 clients, 44 offices ▮ £13bn AUMs, balance sheet of £27bn (deposits + lending) ▮ Coutts UK 3yr CAGR 26% in profit, after significant investment in additional bankers Business Priorities ▮ Build ultra high net worth capability with GBM ▮ Expand expatriate proposition offshore Slide 25 Private Banking – International 999 ▮ Strong presence in Europe and Asia – 15 offices, 235 private bankers ▮ £13bn AUMs, balance sheet of £7bn (deposits + lending) ▮ 3yr CAGR 22% in profit Business Priorities ▮ Increase private bankers by 35% to 318 at FY07 ▮ Partnership with Bank of China ▮ Partnering with Corporate banking in new locations and products in Asia and Middle East Slide 26 Summary ▮ Strong franchise with diverse income streams and stable product margins ▮ UK credit environment still challenging but our metrics remain stable ▮ New organisation provides opportunity for increased cost efficiency ▮ Further opportunities in savings, investments, private banking and business banking Slide 27 Drivers of Growth ▮ Diversified income 999 ▮ Scale 999 ▮ Distribution 999 ▮ Growing market share 99 ▮ New products/new markets 9 RBSRBS InsuranceInsurance MarkMark FisherFisher ChairmanChairman Slide 29 Diversified Income 1H06 Income £2,761m Rescue 3% Other 7% Commercial 7% UK Home 18% UK Motor 58% International Motor 7% Slide 30 Diversified Income 1H06 Income £2,761m Broker 14% Motor 39% External partners 15% Own brands 55% Internal partner 16% Home 9% Other 5% Rescue 2% Slide 31 Scale UK Market Positions Rank Personal motor Total #1 Own brands #1 Internal partner – TPF #3 External
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