#1XRBS The Royal Bank of Scotland Group#2This 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.#3XRBS The Royal Bank of Scotland Group Sir Fred Goodwin Group Chief Executive#4RBS Group Structure CUSTOMERS I Ulster Bank ■ Direct Line I RBS I RBS Citizens I First Active ■ Churchill NatWest NatWest ■ Charter One Direct brands ■ Personal I Coutts Business ■ Corporate Personal ■ Privilege NIG ■ International ■ Small business ■Credit cards ■ Wealth management ■Commercial ■ Mid-corporate ■ Large corporate Financial institutions Personal ■Business Commercial ■ Mid-corporate I RBS Greenwich Capital " Ulster Bank RBS Insurance Retail Markets MANUFACTURING Corporate Banking & Financial Markets Citizens Technology Operations Services Slide 4#5RBS Group Structure CUSTOMERS ■ Privilege I Ulster Bank ■ Direct Line I RBS I First Active ■ Churchill NatWest Direct brands ■ Personal I Coutts Business ■ Corporate Personal NIG ■ International ■ Small business ■Credit cards ■ Wealth management RBS NatWest RBS Greenwich Capital Commercial ■ Mid-corporate ■ Large corporate Financial institutions Citizens ■Charter One " Personal ■Business Commercial ■ Mid-corporate Ulster Bank RBS Insurance Retail Markets MANUFACTURING Corporate Banking & Financial Markets Citizens Technology Operations Services Slide 5#6Group Operating Profit UK GAAP 2004 £m Slide 6 2003 Change Change £m £m Corporate Banking & Financial Markets 4,265 3,620 645 +18% Retail Markets 4,787 4,453 334 +8% Manufacturing (2,439) (2,114) (325) -15% Citizens 1,037 857 180 +21% RBS Insurance 862 609 253 +42% Ulster Bank 468 354 114 +32% Central items (879) (711) (168) -24% Group operating profit 8,101 7,068 1,033 +15%#7Slide 7 Corporate Banking & Financial Markets Agenda 10.05 Introduction and Overview Johnny Cameron 10.45 Mid-Corporate and Commercial Alan Dickinson 11.20 Coffee Break 11.35 Global Banking and Markets CBFM US 12.30 Conclusions Brian Crowe Jay Levine Johnny Cameron Questions & Answers 13.00 Lunch#8RBS The Royal Bank of Scotland Group Corporate Banking & Financial Markets#9RBS The Royal Bank of Scotland Group Introduction and Overview Johnny Cameron Chief Executive, CBFM#10Slide 10 Corporate Banking & Financial Markets ■ Relationship banking ■ Broad range of customers from large corporates to small commercials (not small businesses) ■ 15,000 people ■ Leading capability across range of products ■ Strong position in UK, growing in US, Europe and Asia ■ 2004 total income £7.0 billion ■ 2004 contribution £4.4 billion#11Slide 11 Corporate Banking & Financial Markets Since the last CBFM presentation in 2000, some things have not changed... ■ Relationship-led ■ Hands-on management ■ Close to customers ■ Credit committees key to managing risk and returns ■ Growth-oriented#12Slide 12 Corporate Banking & Financial Markets some things have changed a lot ■ Built a truly international business ■ Expanded our distribution capability ■ Established ourselves in major markets ■ Recruited additional high calibre people ■ We are now competing against a different peer group#13Strong Growth in Income and Contribution Slide 13 UK GAAP 2001 2004 Growth £m ₤m % pa Total income 5,164 6,992 +11% Direct expenses 1,470 2,005 +11% Provisions 502 573 +5% Contribution 3,192 4,414 +11%#14Strong Growth in Income and Contribution Slide 14 IFRS 1H04 £m 1H05 Growth ₤m % Total income 3,331 3,927 +18% Direct expenses 1,024 1,198 +17% Provisions Contribution 253 181 -28% 2,054 2,548 +24%#15Consistent Growth in Income Total Income £bn 4.0 3.0 2.0 1.0 0.0 Slide 15 1H01 2H01 1H02 2H02 1H03 2H03 1H04 2H04 1H05 IFRS#16Consistent Growth in Contribution Contribution £bn 3.0 2.0 1.0 0.0 Slide 16 1H01 2H01 1H02 2H02 1H03 2H03 1H04 2H04 1H05 IFRS#17Consistent Growth ■ Consistency of income and contribution growth reflects diversity of income ■ CBFM is diversified - By business - By geography - By customer Slide 17#18Diversity by Business Slide 18 Business 1H05 Income 1H05 Income £m % CBFM Core Banking 1,749 45% Structured Finance 726 18% Financial Markets 1,452 37% Total CBFM 3,927 100%#19Diversity by Geography Slide 19 Geography 1H05 Income 1H05 Income £m % CBFM UK 2,853 72% US Europe Asia-Pacific 695 18% 301 8% 78 2% Total CBFM 3,927 100%#20Diversity by Business and Geography 1H05 Income £m Slide 20 UK US Europe Asia- Total Pacific CBFM Core Banking 1,662 26 55 6 1,749 Structured Finance 525 63 127 11 726 Financial Markets 666 606 119 61 1,452 Total CBFM 2,853 695 301 78 3,927#21Diversity by Customer Customers Financial institutions Large corporates Slide 21 UK US Europe Asia- Pacific Mid-corporates Citizens X X Commercials Citizens X Small businesses Retail Citizens X X Markets#22Diversity by Customer Customers Slide 22 UK US Europe Asia- Pacific Financial institutions Large corporates ✔ Mid-corporates Citizens X X Commercials Citizens X Small businesses Retail Citizens X X Markets#23Diversity by Customer Size Different Customers Have Different Needs Commercials Mid-corporates Large Corporates Sophistication Financial Institutions Slide 23 Mid-Corporate and Commercial Global Banking and Markets#24Different Customer Needs Mid-Corporate and Commercial ■ Relationship manager ■ Full suite of products ■ Effective co-ordination of product delivery ■ Responsive credit process ■ Quality of service support Global Banking and Markets ■ Relationship ■ Product excellence ■ Access to markets ■ Intellectual capital ■ Lack of conflicts Source: Based on RBS's analysis of external research from agencies including TNS, Greenwich Associates, Brendan Wood International and RBS's own data Slide 24#25Diversity of Income Slide 25 1H05 Income £m Mid-Corporate and Commercial Global Banking and Markets Total CBFM Core Banking 1,223 526 1,749 Structured Finance 726 726 Financial Markets 84 1,368 1,452 Total CBFM 1,307 2,620 3,927#26Diversity of Income 1H05 Income £m Slide 26 Mid-Corporate ! Global Banking and Markets and Commercial Asia- UK | UK US Europe Pacific Core Banking 1,223 439 26 55 6 Structured Finance 525 63 127 11 Financial Markets 84 582 606 119 61 Total CBFM 1,307 1,546 695 301 78#27Financial Performance ■ Results ■ Income ■ Efficiency ■ Risk ■ Return on capital ■ Return on market risk Slide 27#281H05 Results Slide 28 Em Mid-Corporate Global Banking Total and Commercial and Markets CBFM Net interest income 852 617 1,469 Non-interest income 455 2,003 2,458 Total income 1,307 2,620 3,927 Direct expenses 328 870 1,198 Provisions 100 81 181 Contribution 879 1,669 2,548 Average RWAs (£bn) 68.3 124.3 192.6#29Income Slide 29 1H05 £m Mid-Corporate Global Banking Total and Commercial and Markets CBFM Net interest income 852 617 1,469 Non-interest income 455 2,003 2,458 Percentage of total income - Net interest income 65% 24% 37% - Non-interest income 35% 76% 63%#30Financial Metrics Slide 30 1H05 Mid-Corporate Global Banking and Commercial Total and Markets CBFM Income (£m) 1,307 2,620 3,927 Average RWAs (£bn) 68.3 124.3 192.6 Total income/ average RWAS 3.9% 4.3% 4.1%#31Total Income/Average RWAS Slide 31 UK GAAP 2001 2002 2003 2004 IFRS 1H04 1H05 Mid-Corporate and Commercial 4.6% 4.4% 4.1% 4.1% 4.1% 3.9% Global Banking and Markets 4.5% 4.3% 4.2% 4.2% 4.2% 4.3% Total CBFM 4.5% 4.3% 4.1% 4.2% 4.2% 4.1%#32Income Growth Growth % pa 1H01-1H05 Growth % pa 1H04-1H05 Mid-Corporate and Commercial 7% 11% Global Banking and Markets 17% 22% Total CBFM 13% 18% Slide 32#33Efficiency Slide 33 1H05 Total income Direct expenses Mid-Corporate Global Banking Total and Commercial and Markets CBFM 1,307 2,620 3,927 328 870 1,198 Direct expenses/ total income 25.1% 33.2% 30.5%