Final Results - Pre-tax Profit Up 20% - Part 2

Royal Bank of Scotland Group PLC 29 November 1999 PART 2 FIVE-YEAR FINANCIAL SUMMARY THE GROUP 1999 1998 1997 1996 1995 £m £m £m £m £m Profit before provisions and 1,500 1,217 916 758 716 exceptional items Provisions (276) (200) (146) (113) (112) Investment write-offs (13) (10) (2) (1) (2) ----- ----- ----- ---- ---- PROFIT BEFORE EXCEPTIONAL ITEMS 1,211 1,007 768 644 602 Gain on Superdiplo - 96 - - - Far East bad debt provisions - (132) - - - Far East investment write-offs - (14) - - - Write-down of finance leases - (13) (41) - - Provision for Year 2000 costs - - (29) - - Restructuring costs in CBNH - - - (21) - ----- ----- ----- ---- ---- GROUP OPERATING PROFIT 1,211 944 698 623 602 Profit on sale of fixed asset - 57 34 - - investment Profit on sale of US mortgage - - 28 - - servicing business Profit on sale of investment in - - - 72 - associated undertaking ----- ----- ----- ---- ---- PROFIT BEFORE TAXATION 1,211 1,001 760 695 602 Taxation (361) (286) (219) (191) (202) ----- ----- ----- ---- ---- PROFIT AFTER TAXATION 850 715 541 504 400 ----- ----- ----- ---- ---- Earnings per share - adjusted 87.8p 72.3p 53.5p 46.4p 43.9p - unadjusted 87.8p 73.4p 55.4p 54.0p 43.9p Dividends per share 28.5p 24.6p 21.4p 18.6p 16.2p Dividend cover (times) 3.1 3.0 2.6 2.9 2.7 Shareholders' funds - equity 2,852 2,115 2,308 1,871 1,538 - non-equity 1,350 838 734 639 626 Pre-tax return on average 2.29 2.12 1.84 1.82 1.93 weighted risk assets (%) Return on ordinary shareholders' equity (including exceptionals) - pre-tax (%) 47 41 33 38 40 - post-tax (%) 32 28 23 26 25 Cost:income ratio (%) 49.5 52.0 52.5 50.0 51.7 SEGMENTAL ANALYSIS OF PROFIT 1999 1998 1997 1996 1995 BEFORE EXCEPTIONAL ITEMS £m £m £m £m £m UK Bank 736 626 541 455 355 New Retail Financial Services (35) (59) (33) (38) (15) Businesses Angel Trains 53 46 - - - RBS Cards 85 61 48 37 36 Investor Services 14 5 (12) (17) (13) Direct Line Insurance 101 64 36 26 112 Citizens 242 247 189 168 107 RBSI 70 55 45 38 27 Central items (55) (38) (46) (25) (7) ----- ----- ----- ---- ----- 1,211 1,007 768 644 602 ----- ----- ----- ---- ----- UK BANK 1999 1998 1997 1996 1995* £m £m £m £m £m Profit before provisions 920 767 638 553 444 Provisions (184) (141) (97) (98) (89) ----- ----- ----- ----- ----- Profit before exceptional items 736 626 541 455 355 ----- ----- ----- ----- ----- Cost:income ratio (%) 51.9 55.3 58.2 59.7 64.8 Pre-tax return on ordinary 39 38 37 33 30 equity (%) Total assets (£bn) 57.9 51.8 50.7 44.8 40.0 Shareholder's funds (£m) 2,460 2,178 2,192 1,791 1,715 Employees at 30 September 18,160 17,830 17,670 16,810 17,480 (* pro-forma) NEW RETAIL FINANCIAL SERVICES 1999 1998 1997 1996 1995 BUSINESSES £m £m £m £m £m Loss before provisions (16) (53) (31) (37) (14) Provisions (19) (6) (2) (1) (1) ----- ----- ----- ----- ----- Loss before exceptional items (35) (59) (33) (38) (15) ----- ----- ----- ----- ----- Ordinary shareholders' funds - 119 97 42 35 22 RBSG share (£m) Total assets (£m) 3,748 2,293 1,472 716 273 Employees at 30 September 2,440 2,350 1,800 660 220 ANGEL TRAINS 1999 1998 1997 1996 1995 £m £m £m £m £m Profit before exceptional items 53 46 - - - ----- ----- ----- ----- ----- Cost:income ratio (%) 77 75 - - - Total assets (£m) 1,642 887 - - - Shareholder's funds (£m) 291 235 - - - Employees at 30 September 110 80 - - - RBS CARDS 1999 1998 1997 1996 1995 £m £m £m £m £m Profit before provisions 156 108 80 55 41 Provisions (71) (47) (32) (18) (5) ----- ----- ----- ----- ----- Profit before exceptional items 85 61 48 37 36 ----- ----- ----- ----- ----- Cost:income ratio (%) 42.0 47.8 49.0 50.9 52.9 Total assets (£m) 2,286 1,944 1,360 803 468 Shareholder's funds (£m) 201 148 53 35 14 Employees at 30 September 1,200 1,080 750 580 500 INVESTOR SERVICES 1999 1998 1997 1996 1995 £m £m £m £m £m Profit/(loss) before 14 5 (12) (17) (13) exceptional items ---- ---- ---- ---- ---- Cost:income ratio (%) 91 96 111 134 127 Shareholder's funds (£m) 64 55 48 5 3 Employees at 30 September 1,310 1,190 2,020 1,240 1,170 DIRECT LINE INSURANCE 1999 1998 1997 1996 1995 £m £m £m £m £m Profit before exceptional items 101 64 36 26 112 ----- ----- ----- ----- ----- Operating ratio (%) 96 101 106 107 89 Pre-tax return on equity (%) 28 18 11 8 39 Total assets (£m) 1,411 1,201 1,124 1,042 911 Insurance reserves - net (£m) 997 872 773 720 620 Shareholder's funds (£m) 362 315 343 326 311 Employees at 30 September 3,290 3,200 3,020 2,690 2,850 CITIZENS 1999 1998 1997 1996 1995 £m £m £m £m £m Profit before provisions 257 262 205 166 125 (Provisions)/net releases (15) (15) (16) 2 (18) ----- ----- ----- ----- ----- Profit before exceptional items 242 247 189 168 107 ----- ----- ----- ----- ----- US$/£ rate of exchange - 1.63 1.65 1.63 1.54 1.58 average Cost:income ratio (%) 53.2 50.2 54.4 54.9 56.6 Pre-tax return on equity (%) 31 39 37 41 32 Total assets (£m) 11,824 9,714 9,565 8,854 6,148 Shareholder's funds (£m) 905 707 575 522 337 Employees at 30 September 5,190 5,010 4,910 4,580 3,160 RBSI 1999 1998 1997 1996 1995* £m £m £m £m £m Profit before provisions 70 55 46 38 29 Provisions - - (1) - (2) ----- ----- ----- ----- ----- Profit before exceptional items 70 55 45 38 27 ----- ----- ----- ----- ----- Cost:income ratio (%) 45.7 47.1 46.5 44.1 38.3 Pre-tax return on ordinary 22 20 20 22 19 equity (%) Total assets - gross (£m) 7,877 7,259 6,130 4,511 3,237 Shareholder's funds (£m) 359 299 254 194 147 Employees at 30 September 920 890 680 590 440 (* pro-forma) RATIOS AND OTHER INFORMATION 1999 1998 Weighted risk assets (£m) - on balance sheet 51,485 44,354 - off balance sheet 5,270 4,736 ------ ------ 56,755 49,090 ------ ------ Risk asset ratio - tier 1 8.1% 6.6% - total 12.1% 11.2% Net asset value per ordinary share (excluding proceeds from dollar 320p 242p preference shares) Share price at 30 September 1303p 670p Employees at 30 September UK Bank 18,160 17,830 New Retail Financial Services 2,440 2,350 Businesses Angel Trains 110 80 RBS Cards 1,200 1,080 Investor Services 1,310 1,190 Direct Line Insurance 3,290 3,200 Citizens 5,190 5,010 RBSI 920 890 Central 50 50 ------- ------ Total 32,670 31,680 ------- ------ US$/£ rate of exchange - spot at 30 September $1.6465 $1.7001 - average for year to 30 September $1.6297 $1.6536 The Group's consolidated financial statements are prepared in accordance with generally accepted accounting principles followed in the UK (UK GAAP). These differ in certain significant respects from US GAAP. Selected figures on a UK GAAP basis and as estimated on a US GAAP basis are as follows: 1999 1998 UK US UK US GAAP GAAP GAAP GAAP £m £m £m £m Net income 856 758 695 539 Shareholders' equity 4,202 5,099 2,953 4,006 Total assets 88,852 90,623 79,676 81,802 The information in this announcement does not comprise statutory accounts within the meaning of Section 240 of the Companies Act 1985. This announcement was approved by the Board of Directors on 28 November 1999. CONTACTS Sir George Mathewson Group Chief Executive 0171 427 8145 0131 523 2672 Fred Goodwin Deputy Group Chief Executive 0171 427 8116 0131 523 2033 This document and the related materials are not an offer for sale or subscription of any securities of The Royal Bank of Scotland Group plc ('RBS') nor a solicitation of an offer to buy or subscribe for any securities of RBS. RBS securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of RBS securities to be made in the United States will be made by means of a prospectus that may be obtained from RBS and that will contain detailed information about RBS and its management, as well as financial statements.

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