RBS Relationships

The Royal Bank of Scotland Group was founded in 1727 and is now one of Europe's leading financial services groups. By market capitalization as in June 2001, it is UK's seventh largest company, the second largest bank in the UK, and it ranks seventh in the world.

In March 2000, the Royal Bank of Scotland group completed the acquisition of NatWest after a contested bid and with the help of Banco Santander Central Hispano S.A. (BSCH) of Spain.

In March 2001, Sir George Mathewson became Chairman of the Royal Bank of Scotland Group. On the board of Group is Mr. Lawrence R Fish, Chairman, President and CEO of Citizens Financial Services Group.

The enlarged Royal Bank of Scotland Group has more than 15 million customers, more than 2,200 UK branches and it employs over 85,000 staff worldwide.

In alliance with BSCH and TESCO (number one in supermarket in UK), the Royal Bank of Scotland Group aims to further develop financial service activities across Europe.

Sir George Mathewson stated in August 2001 that "We remain confident that the strength, diversity and flexibility of our business will enable us to continue to deliver superior performance for our shareholders in any credible economic scenario".

Banco Santander Central Hispano S.A (BSCH) of Spain is the leader in running of Spanish banks. It offers retail-banking services in Spain as well as other European countries and in Latin America. Its subsidiaries, including Chile's Banco Santiago and Banco Santander-Chile, and Mexico's Grupo Financiero Santander Mexicano, also make it the top banking group in Latin America, where it is active in more than a dozen countries. The bank also offers asset management, wholesale banking, private banking, and other financial services through its subsidiaries and partnerships.

BSCH holds substantial minority shareholdings in The Royal Bank of Scotland of UK, Commerzbank of Germany and Societe Generale of France. In fact BSCH holds nearly 10 percent of RBOS's shares and it assisted RBOS in the contested bid to acquire NatWest bank of UK in March 2000.

Citizens Financial Group, Inc. (Citizens) of USA is a financial and banking company headquartered in Providence, Rhode Island. It has more than 330 branches in Connecticut, Massachusetts, New Hampshire and Rhode Island. It is wholly owned by The Royal Bank of Scotland Group plc.

In July 2001,Citizens reached agreement to acquire the retail, small business and certain middle market commercial banking businesses of Pennsylvania based Mellon Financial Corporation (Mellon). This acquisition will add nearly 350 branches in Pennsylvania, Delaware, New Jersey and Virginia making Citizens one of the top 20 commercial banks in the United States.

"We have always believed that the Citizens model was capable of being replicated in other parts of the northeastern US," said Fred Goodwin, Group Chief Executive of RBOS on the acquisition of Mellon.

Lawrence K Fish is Chairman, President and CEO of Citizens Financial Group. He is also a director of the Royal Bank of Scotland and Sir George Mathewson, Chairman of RBOS, sits on the board of Citizens

Citizens launched a new advertising campaign in June 2001. The ad campaign was focused on customer service. Lawrence Fish stated that "Citizens has always made customer service one of the cornerstones of our banking principles. It all starts with customer. The ad campaign is our message to customers that they have always been priority for us, and that they are integral part of our exceptional growth and success."

Reuters reported on 30 August 2001 that 40,000 federal tax returns and tax payment checks totaling $800 million were lost or destroyed at a processing center operated by Mellon Bank for the Internal Revenue Service. Subsequently IRS canceled its contract with Mellon. Two consumer groups had asked federal regulators to block Citizens proposed acquisition of Mellon, claiming Citizens has disproportionately denied loans to minorities according to The Associated Press article of 28 August 2001.

Ulster Bank based in Northern Ireland is a member of the Royal Bank of Scotland. It has strong presence in Republic of Ireland and Isle of Man. This bank was acquired by RBOS through NatWest bank.

Coutts Group, the International private banking group. Coutts is a bank, which manages the wealth of over 70,000 high net worth clients around the world. It has over 35 offices in the world. Private clients include the Royal family of UK. Justice Pumfrey, who presided over my case against Natwest, has a relationship/account with Coutts.

Direct line Insurance is the largest telephone motor insurance Group in UK. It has acquired several private motor insurance companies in Europe and the US in recent years. According to Fred Goodwin, Group Chief Executive of RBOS, "Direct line's success in the UK and in Spain in becoming the leading direct motor insurer demonstrates proven experience for building market share. The Direct line model will shake up the German and Italian insurance markets, which are dominated by traditional players, generally with high expense ratios, which use agents who receive commission."

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