#1RBS The Royal Bank of Scotland Group UBS Global Financial Services Conference Sir Fred Goodwin Group Chief Executive#2Certain statements made in this presentation are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results and performance to differ materially from any expected future results or performance, express or implied, by the forward looking statements. Factors that might cause forward looking statements to differ materially from actual results include, among other things, regulatory and economic factors. RBS assumes no responsibility to update any of the forward looking statements contained herein. The information and statements 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 either in the United States or elsewhere; nor does this presentation constitute a solicitation to vote in favour of the proposed transaction. The RBS Ordinary Shares have not been and will not be registered under the U.S. Securities Act of 1933 ("the Securities Act") and may not be offered or sold in the United States unless they are registered with the U.S. Securities and Exchange Commission or pursuant to an exemption from the registration requirements of the Securities Act. There will be no public offering of the RBS Ordinary Shares in the United States.#3As good as it gets? UBS Global Financial Services Conference Titles 2000 Profitability - is it sustainable? 2001 Growth prospects in a low inflation environment 2002 Opportunities in uncertain times 2003 Capturing value in a challenging environment 2004 Managing for growth 2005 As good as it gets? Slide 3#4As good as it gets? RBS Group Operating Profit Growth +31% 2000 Profitability - is it sustainable? 2001 Growth prospects in a low inflation environment +32% 2002 Opportunities in uncertain times +12% 2003 Capturing value in a challenging environment 2004 Managing for growth +11% +15% 2005 As good as it gets? RBS Group operating profit before tax, goodwill amortisation and integration costs as reported Slide 4#5International Economies Forecasters predict positive economic growth NK UK US Germany 2002 2003 2004 2005 2006 1.8% 2.2% 3.1% 2.5% 2.3% 1.9% 3.0% 4.4% 3.7% 3.4% 0.1% 0.1% 1.4% 0.9% 1.4% Source: Datastream, Consensus Economics Slide 5#6Diversity - by Brand/Channel Multi-Brand, Multiple Channel Strategy TESCO Personal Finance Lombard First Active Green Flag motoring assistance ML + DIRECT LINE Coutts ✓✓ The Royal Bank of Scotland Charter One MINT ◆ NatWest Ulster Citizens Bank Bank G The one account ng#7Diversity - by Geography 2004 Operating Profit Charter One Pro forma Rest of World 1% Europe 8% US 25% UK 66% Slide 7#8Diversity - by Geography Income Growth in Local Currency 2004 2003 Change UK (Em) 17,519 15,099 +16% Ireland (€m) 1,040 749 +39% Continental Europe (€m) 1,242 801 +55% United States ($m) 6,362 4,713 +35% Rest of World ($m) 392 373 +5% Total income adjusted for currency impact +20% Slide 8#9Diversity - by Geography United States Income Citizens Corporate Banking & Financial Markets Retail Direct Central items United States 2004 2003 Change $m $m % 3,923 2,983 +32% 1,996 1,541 +30% 196 0 247 189 6,362 4,713 +35% Slide 9#10Diversity - by Geography Continental Europe 2004 2003 Change Income €m €m % Corporate Banking & Financial Markets 436 263 +66% RBS Insurance 249 231 +8% Wealth Management 223 150 +49% Retail Direct 214 121 +77% Central items 120 36 Continental Europe 1,242 801 +55% Slide 10#11Diversity - by Business Corporate Banking & Financial Markets 33% Citizens 9% 2004 Income Retail Banking + Retail Direct 30% Wealth Management 4% Ulster Bank 3% RBS Insurance 21% Slide 11#12Diversity - by Type of Income 2004 Income Net Interest Income 40% Non-Interest Income 60% Slide 12#13Diversity of Non-Interest Income Non-Interest Income % of Total Income Net fees and commissions - Money transmission and lending - Cards related - Other General insurance premium income Dealing profits (before associated costs) Other operating income Non-interest income to total income 2004 21% 11% 4% 6% 22% 9% 8% 60% Slide 13#14Diversity of Net Interest Income % of Total Income 2004 Personal deposits Personal lending 10% 12% Business deposits 7% Business lending 11% Net interest income to total income 40% Slide 14#15As good as it gets? ■ Corporate Banking & Financial Markets Slide 15#16x Corporate Banking & Financial Markets 2004 2003 Change ₤m £m Net interest income 2,545 2,324 +10% Non-interest income 4,964 4,373 +14% Total income Direct expenses Contribution before provisions Provisions Contribution 7,509 6,697 +12% 2,664 2,322 +15% 580 4,845 4,375 +11% 755 -23% 4,265 3,620 +18% Slide 16#17UK Corporate Lending Corporate sector lending is increasing % increase 20 15 10 10 5- 0 2000 2001 2002 2003 2004 2005 Month on prior year month growth in non-financial lending Source: Bank of England, financial institution sterling net lending excl securitisations to PNFC, seasonally adjusted#18x Corporate Banking & Financial Markets Income 2004 2003 Change US ($m) 1,996 1,541 +30% Continental Europe (Єm) 436 263 +66% ■ United States - - Established debt capital markets business, leveraging Greenwich Capital's customer relationships Increased distribution of CBFM products to Citizens' customers ■ Continental Europe - - Expanded activities in Germany, France, Italy, Spain and Scandinavia Increased focus on financial institutions and distribution of financial markets products Slide 18#19x Corporate Banking & Financial Markets ■ UK activity levels good ■ Strong momentum in Europe ■ Meaningful organic growth in US coupled with greater collaboration with Citizens ■ Credit quality stable Slide 19#20As good as it gets? ■ Corporate Banking & Financial Markets ■ Retail Banking and Retail Direct As good as it gets? no Slide 20#21Retail Banking 2004 2003 Change £m £m Net interest income 3,112 2,959 +5% Non-interest income 1,630 1,514 +8% Total income 4,742 4,473 +6% Direct expenses 1,074 1,030 +4% Contribution before provisions 3,668 3,443 +7% Provisions 389 273 +42% Contribution 3,279 3,170 +3% 2003 restated following transfer of certain activities from Wealth Management Slide 21#22Retail Direct 2004 2003 Change £m £m Net interest income 938 849 +10% Non-interest income 1,191 986 +21% Total income 2,129 1,835 +16% Direct expenses 712 657 +8% Contribution before provisions 1,417 1,178 +20% Provisions 377 297 +27% Contribution 1,040 881 +18% 2003 restated following transfer of certain activities to Manufacturing Slide 22#23Retail Banking and Retail Direct Personal lending Personal deposits % of Group Income 2004 8% 6% Non-interest income and small business banking 16% Total 30% Slide 23#24UK Consumer Confidence UK consumer confidence has remained stable Index 40 30 20 20 T Personal financial situation 10 0 -10 -20 T -30 2000 2001 2002 2003 2004 2005 Source: GfK Slide 24#25UK Personal Lending UK personal lending has doubled in 7 years £bn 1,500 1,000 500 | | I I I Personal lending (mortgages + credit cards + personal loans) I I I I I | I I 0 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 Source: Bank of England Slide 25#26UK Personal Lending % of Total Income 2004 Net Non- Interest Interest Total Credit cards + personal loans 7% 2% 9% Mortgages 2% 2% Personal lending 9% 2% 11% Slide 26#27UK Personal Lending But UK personal sector gearing remains low % 20 Total Household Interest Payments/Total Household Disposable Income 15 10 5 0 1985 1990 Source: Bank of England (series commenced 1987) 1995 2000 2005 Slide 27#28UK Personal Lending The rate of increase in personal loans has declined % increase 20 15 10 10 5 0 2000 Credit cards Personal loans 2001 Annual growth in unsecured balances Source: Bank of England 2002 2003 2004 2005 Slide 28#29Retail Banking and Retail Direct ■ Continuing income growth, although consumer in a period of transition - Reducing growth in income from unsecured lending - Increased volume of secured lending - Increased activity in savings ■ Continued growth in small business income and money transmission ■ Some increase in arrears, but from historically low level Slide 29#30As good as it gets? ■ Corporate Banking & Financial Markets ■ Retail Banking and Retail Direct As good as it gets? no no Slide 30#31As good as it gets? ■ Corporate Banking & Financial Markets ■ Retail Banking and Retail Direct ■ Citizens As good as it gets? no no Slide 31#32Citizens 2004 2003 Change $m $m Net interest income 2,821 2,143 +32% Non-interest income 1,102 841 +31% Total income Expenses 3,923 2,984 +31% 1,877 1,438 +31% Contribution before provisions Provisions 146 2,046 1,546 +32% 145 +1% Contribution 1,900 1,401 +36% Slide 32#33Citizens Excluding Acquisitions $m 2004 2003 Change $m Net interest income Non-interest income 2,352 2,124 +11% 856 838 +2% Total income 3,208 2,962 +8% Expenses 1,525 1,430 +7% Contribution before provisions 1,683 1,532 +10% Provisions 113 145 -22% Contribution 1,570 1,387 +13% Slide 33