Offer

Royal Bank of Scotland Group PLC
14 August 2001


Not for release, publication or distribution in or into the United States,
Canada, Australia, the Republic of Ireland or Japan


PRESS ANNOUNCEMENT


FOR IMMEDIATE RELEASE


14 August 2001


RECOMMENDED CASH OFFER BY

HAWKPOINT PARTNERS LIMITED

on behalf of

THE ROYAL BANK OF SCOTLAND plc ('RBS')

a wholly-owned subsidiary of

THE ROYAL BANK OF SCOTLAND GROUP plc ('RBSG')

for

EURO SALES FINANCE PLC ('ESF')




Summary



The Board of RBS and the Board of ESF announce that they have agreed the terms
of a recommended cash offer to be made by Hawkpoint on behalf of RBS, a
wholly-owned subsidiary of RBSG, for the entire issued and to be issued
ordinary share capital of ESF.



The Offer:

-  will be unanimously recommended by the Board of ESF, which has been
   advised by Deutsche Bank;

-  is 440 pence in cash for each ESF Share;

-  values the entire issued ordinary share capital of ESF at approximately £68  
   million;

-  represents a premium of approximately 12.8 per cent. over the closing middle 
   market price of 390 pence per ESF Share on 13 August 2001, the
   last dealing day prior to the date of this announcement;

-  represents a premium of approximately 19.2 per cent. over the closing middle 
   market price of 369 pence per ESF Share on 21 June 2001, the last dealing day
   prior to the announcement that ESF had received a number of
   offers in excess of reported net book value as at 31 March 2001;

-  represents a premium of approximately 34.8 per cent. over the
   closing middle market price of 326.5 pence per ESF Share on 18 April 2001,   
   the last dealing day prior to the announcement that the Board of ESF was
   considering, inter alia, the sale of ESF; and

-  represents a premium of approximately 6.1 per cent. over ESF's net
   asset value of approximately 415 pence per ESF Share as disclosed in ESF's
   preliminary statement of results for the year ended 30 June 2001 which has
   been released today.



RBS has received irrevocable undertakings to accept the Offer from the
directors of ESF and one institutional shareholder in respect of 2,158,102 ESF
Shares, representing, in aggregate, approximately 14.0 per cent. of ESF's
existing issued ordinary share capital.  These undertakings are binding in the
event that a higher competing offer for ESF is made.



RBS has also received irrevocable undertakings to accept the Offer from two
institutional shareholders in respect of 1,585,177 ESF Shares, representing,
in aggregate, approximately 10.3 per cent. of ESF's existing issued ordinary
share capital where such ESF Shareholders have retained the right to accept a
competing higher offer having a total consideration of 10 per cent. or more
per ESF Share above that offered by RBS.



RBS has also received letters of intent to accept the Offer from four
institutional shareholders in respect of 5,976,670 ESF Shares, representing,
in aggregate, approximately 38.7 per cent. of ESF's existing issued ordinary
share capital.



Commenting on the Offer, Iain Robertson, Chief Executive, Corporate Banking
and Financial Markets, RBSG, said:



'We are pleased to have reached agreement with the directors of ESF on the
terms of the Offer.  The acquisition of ESF is a logical extension of our
sales finance business and it fits well with our strategy of both supporting
the international activities of our UK-based clients and growing our corporate
banking franchise in Europe.



We are confident that the combination of our balance sheet strength and risk
management expertise will complement ESF's dynamic and entrepreneurial
approach to business and allow us to unlock the growth opportunities that
exist across Europe.'



Commenting on the Offer, Colin Rutherford, the Chairman of ESF, said:



'The Board considers the Offer of 440 pence in cash per ESF Share as
representing the best option for ESF Shareholders.  RBS is gaining a strong
European platform to develop with its resources and, in turn, the management
and employees of ESF have an opportunity to be part of one of Europe's leading
financial institutions.'



These highlights should be read in conjunction with, and are subject to, the
text of the attached full announcement






Enquiries:


The Royal Bank of Scotland Group plc
Fred Watt, Group Finance Director                   Tel:  [phone]
Anthony Frost, Head of Public Relations,            Tel:  [phone]       
Corporate Banking and Financial Markets             Mob:  [phone]
                                  

Hawkpoint Partners Limited (financial adviser to The Royal
Bank of Scotland Group plc)
Charles Williams                                    Tel:  [phone]
Graham Paton

Euro Sales Finance plc
Colin Rutherford                                    Tel:  [phone]

Deutsche Bank AG London (financial adviser to 
Euro Sales Finance plc)                           
Antony Macwhinnie                                   Tel:  [phone]



The availability of the Offer to persons not resident in the United Kingdom
may be affected by the laws of the relevant jurisdiction.  Persons who are not
resident in the United Kingdom should obtain advice and observe any applicable
requirements.  The Offer is not being made, directly or indirectly, in or
into, or by use of the mails, or by any other means or instrumentality
(including, without limitation, facsimile transmission, electronic mail, telex
or telephone) of interstate or foreign commerce, or of any facility of a
national securities exchange, of the United States, Canada, Australia, the
Republic of Ireland or Japan, and the Offer will not be capable of acceptance
by any such means, instrumentality or facility or from within the United
States, Canada, Australia, the Republic of Ireland or Japan.  Accordingly,
copies of this announcement and any other documents related to the Offer are
not being, and must not be, mailed or otherwise distributed or sent in or into
the United States, Canada, Australia, the Republic of Ireland or Japan and
persons receiving such documents (including custodians, nominees and trustees)
must not distribute or send them in, into or from such jurisdictions.



This announcement does not constitute an offer or an invitation to purchase or
subscribe for any securities.



Hawkpoint Partners Limited, which is regulated in the United Kingdom by The
Securities and Futures Authority Limited, is acting exclusively for RBSG and
no-one else in connection with the Offer and will not be responsible to anyone
other than RBSG for providing the protections afforded to customers of
Hawkpoint Partners Limited nor for giving advice in relation to the Offer.



Deutsche Bank AG London, which is regulated in the United Kingdom by The
Securities and Futures Authority Limited, is acting exclusively for ESF and
no-one else in connection with the Offer and will not be responsible to anyone
other than ESF for providing the protections afforded to customers of Deutsche
Bank AG London nor for giving advice in relation to the Offer.



This announcement has been approved by Hawkpoint Partners Limited solely for
the purposes of section 57 of the Financial Services Act 1986.



Not for release, publication or distribution in or into the United States,
Canada, Australia, the Republic of Ireland or Japan


PRESS ANNOUNCEMENT

FOR IMMEDIATE RELEASE

14 August 2001

RECOMMENDED CASH OFFER BY



HAWKPOINT PARTNERS LIMITED



on behalf of



THE ROYAL BANK OF SCOTLAND plc ('RBS')



a wholly-owned subsidiary of



THE ROYAL BANK OF SCOTLAND GROUP plc ('RBSG')



for



EURO SALES FINANCE PLC ('ESF')



1.  Introduction



The Board of RBS and the Board of ESF announce that they have agreed the terms
of a recommended cash offer to be made by Hawkpoint on behalf of RBS, a
wholly-owned subsidiary of RBSG, for the entire issued and to be issued
ordinary share capital of ESF.



2.  The Offer



On behalf of RBS, Hawkpoint will offer to acquire, on the terms and subject to
the conditions set out in Appendix I to this announcement and the further
terms to be set out in the Offer Document and the Form of Acceptance, all of
the ESF Shares on the following basis:



          For each ESF Share                   440 pence in cash



The Offer:

-          values the entire issued ordinary share capital of ESF at
approximately £68 million;

-          represents a premium of approximately 12.8 per cent. over the
closing middle market price of 390 pence per ESF Share on 13 August 2001, the
last dealing day prior to the date of this announcement;

-          represents a premium of approximately 19.2 per cent. over the
closing middle market price of 369 pence per ESF Share on 21 June 2001, the
last dealing day prior to the announcement that ESF had received a number of
offers in excess of reported net book value as at 31 March 2001;


-           represents a premium of approximately 34.8 per cent. over the
closing middle market price of 326.5 pence per ESF Share on 18 April 2001, the
last dealing day prior to the announcement that the Board of ESF was
considering, inter alia, the sale of ESF; and

-           represents a premium of approximately 6.1 per cent. over ESF's net
asset value of approximately 415 pence per ESF Share as disclosed in ESF's
preliminary statement of results for the year ended 30 June 2001 which has been
released today.



The Offer will extend to any ESF Shares which are unconditionally allotted or
issued whilst the Offer remains open for acceptance (or by such earlier date
as RBS may, subject to the Code determine, such earlier date not, without the
consent of the Panel, being earlier than the date on which the Offer becomes
unconditional as to acceptances or, if later, the First Closing Date), as a
result of the exercise of options granted under the ESF Share Schemes or
otherwise.



The ESF Shares to be acquired pursuant to the Offer will be acquired by RBS
fully paid, free from all liens, charges, equitable interests and encumbrances
and other third party interests together with all rights attaching thereto on
or after the date of this announcement, including the right to receive and
retain all dividends and other distributions (if any) declared, made or paid
hereafter.



The Offer is being made by RBS, a wholly-owned subsidiary of RBSG.  The cash
consideration payable under the Offer will be funded using RBS's existing cash
resources.



3.  Irrevocable undertakings



In addition to the ESF directors' irrevocable undertakings referred to in
paragraph 6 below, which lapse only in the event of the Offer lapsing or being
withdrawn, RBS has received an irrevocable undertaking from an institutional
shareholder in respect of 1,479,684 ESF Shares representing approximately 9.6
per cent. of ESF's existing issued ordinary share capital.  This undertaking
is binding in the event that a higher competing offer for ESF is made.



RBS has also received irrevocable undertakings from two institutional
shareholders in respect of 1,585,177 ESF Shares representing, in aggregate,
approximately 10.3 per cent. of ESF's existing issued ordinary share capital.
The institutional shareholders retain the right to accept a competing offer
having a total consideration of 10 per cent. or more per  ESF Share above that
offered by RBS.



Further, RBS has received letters of intent to accept the Offer from four
institutional shareholders in respect of 5,976,670 ESF Shares representing, in
aggregate, approximately 38.7 per cent. of ESF's existing issued ordinary
share capital.



4.  Background to the Offer



ESF, which was formed in March 1995, until recently experienced strong growth
rates driven by its European strategy, strong competitive position,
distribution channels and scaleable business model.



However, the setting up of decentralised operations in pursuit of its core
objective to become the leading provider of working capital solutions to
growth-led European small and medium-sized enterprises ('SMEs') and the focus
on new business placed strains on cashflow, accounting and internal controls.



Following the rapid expansion in its receivables book, particularly in the
growth markets of France and Germany, ESF traded ahead of its committed
liquidity facilities.  As a result, on 9 April 2001 ESF announced that, as a
consequence of restrictions on new client advances imposed by its funding
position, its results for the year ended 30 June 2001 would be materially
below market expectations and that it was in discussions with its lead banks
to examine ways in which ESF's funding position could be improved.  The Board
of ESF also announced that it was reviewing with its advisers a range of
strategic options.  Following the consideration of a number of alternative
proposals for ESF's future, the Board of ESF concluded that the long-term
prospects of the business would be best preserved by way of a strategic
partnership or a business combination with a third party which would benefit
from access to ESF's European infrastructure and management.



Accordingly, ESF entered into discussions with a large number of parties who
might potentially be interested in making an offer.  The Board of ESF was
conscious that it was in the interests of both ESF's shareholders and
employees that this process should be completed as quickly and efficiently as
possible in view of the potentially damaging effect that continued uncertainty
would have on shareholder value, the employees and customers of ESF.



The preliminary results for the year ended 30 June 2001 (announced today) show
that ESF has been severely affected by both the operating restrictions of the
last quarter and the consequences of a tougher and more realistic management
of its activities.  Significantly increased funding costs have been incurred
and business development initiatives halted.  In addition, a number of issues
have now been identified as a consequence of comprehensive reviews of the
lending book resulting in significant additional bad debt provisions in the UK
and Germany.  This has resulted in a loss before taxation for the year ended
30 June 2001 of £10.9 million and a reduction in net asset value as at 30 June
2001 to approximately £64 million.



At the conclusion of this process, the Board of ESF is satisfied that it has
done all in its power to obtain the best available offer for ESF.  The Board
of ESF believes that ESF Shareholders should recognise that ESF remains
reliant on the support of its bankers and that in order for ESF to grow once
again into a leading European sales finance business it requires a strong
financial partner.  The Board of ESF believes that the acquisition of ESF by
RBS is the most effective way of realising value for ESF Shareholders.



5.  Reasons for the Offer



RBS is committed to a phased expansion of its sales finance capability into
mainland Europe in order to support the increasing demand from UK clients to
fund European subsidiaries, as well as to open up new markets for this growing
form of asset finance.



The Acquisition will provide RBS with an existing sales finance business in
France, Germany and the Netherlands, as well as a springboard for expansion
into other adjacent European markets.  In the UK, RBS expects ESF's business
to benefit from having access to RBS sales channels.  Further, the Acquisition
will secure ESF's funding requirements and will enable the business to resume
growth.



6.  Recommendation



The directors of ESF, who have been so advised by Deutsche Bank, consider the
terms of the Offer to be fair and reasonable.  In providing advice to the
directors of ESF, Deutsche Bank has taken into account the commercial
assessment of the directors of ESF.



Accordingly, the directors of ESF will unanimously recommend all ESF
Shareholders to accept the Offer as they have irrevocably undertaken to do in
respect of all the ESF Shares in which they are interested, which together
amount to 678,418 ESF Shares, representing approximately 4.4 per cent. of
ESF's issued ordinary share capital.



7.  Information on RBS



RBS is a wholly-owned and principal operating subsidiary of RBSG.



The RBS Group is a diversified financial services group engaged in a wide
range of banking, financial and finance-related activities in the UK and
internationally.  With a market capitalisation of approximately £49 billion
(as at 13 August 2001), the RBS Group is the second largest bank in Europe and
the sixth largest bank in the world.



The principal operating divisions of the RBS Group are Corporate Banking and
Financial Markets, Retail Banking, Retail Direct, Manufacturing, Wealth
Management, Direct Line Insurance Group, Ulster Bank and Citizens.



RBSG has two principal operating subsidiaries, RBS and NatWest, each of which
controls, directs and promotes the operations of various subsidiary companies.
RBS is a major clearing bank with 634 branches in the UK as at 31 December
2000 and whose predecessors date back to 1727.  NatWest was acquired by RBSG
on 6 March 2000 for approximately £21 billion.



As at 31 December 2000, the RBS Group had total assets of £320 billion and
increased its pro forma profit before taxation, goodwill amortisation and
integration costs by 31 per cent. to £4,401 million in the year ended 31
December 2000.  As at 30 June 2001, the RBS Group had total assets of £341
billion and, in the six months to 30 June 2001, increased its pro forma profit
before taxation, goodwill amortisation and integration costs by 37 per cent.
to £2,751 million.  The RBS Group has more than 18 million UK personal
customers and approximately 2,300 UK branches.  The RBS Group is the UK's
leading corporate bank with over 64,000 corporate customers.



For the 15 months ended 31 December 2000, RBS reported total income of £5,825
million (12 months ended 30 September 1999: £3,862 million), profit before
taxation of £1,643 million (12 months ended 30 September 1999: £1,148 million)
and, as at 31 December 2000, total assets of £130,229 million (30 September
1999: £87,389 million).



On 17 July 2001, RBSG announced that its wholly-owned subsidiary, Citizens
Financial Group Inc., had reached agreement, subject to regulatory consents,
for the acquisition of the retail, small business and certain middle market
commercial banking businesses of Pennsylvania-based Mellon Financial
Corporation for a cash consideration of US$2.l billion.



8.  Information on ESF



ESF is a leading independent provider of sales finance to SMEs in the UK,
France, Germany and the Netherlands, with a diverse domestic and European
client base.



ESF was established in 1995 and has grown to a position today where it
provides finance to approximately 800 clients and employs approximately 250
staff.  ESF is organised into 16 Strategic Business Units, or local
distribution centres, of which five are located in the UK, seven in France,
three in Germany and one in the Netherlands.



ESF has today announced its preliminary statement of results for the year
ended 30 June 2001.  These results show sales financed of £3,488 million (30
June 2000: £1,549 million), turnover of £48.7 million (30 June 2000: £23.8
million) and a loss before taxation of £10.9 million (30 June 2000: £5.4
million profit before taxation).  Net assets as at 30 June 2001 were £64.1
million (30 June 2000: £75.1 million) and net advances to clients were £426.6
million (30 June 2000: £266.6 million).



9.  Directors, management and employees



RBS confirms that the existing employment rights, including pension rights, of
all the management and employees of ESF will be fully safeguarded.



10.  ESF Share Schemes



RBS will make appropriate proposals to participants in the ESF Share Schemes
once the Offer becomes or is declared unconditional in all respects, to the
extent that options have not been exercised.



11.  Compulsory acquisition, de-listing and re-registration



If sufficient acceptances of the Offer are received and/or sufficient ESF
Shares are otherwise acquired, RBS intends to apply the provisions of Sections
428 to 430F (inclusive) of the Act to acquire compulsorily any outstanding ESF
Shares following the Offer becoming or being declared wholly unconditional.



It is also intended that, following the Offer becoming or being declared
wholly unconditional and subject to any applicable requirements of the UK
Listing Authority, RBS will procure that ESF applies to the UK Listing
Authority for the ESF Shares to be de-listed.  It is anticipated that the
cancellation of the listing of the ESF Shares on the London Stock Exchange
will, subject to the Listing Rules of the UK Listing Authority, take effect no
earlier than 20 business days following the Offer becoming or being declared
wholly unconditional.  De-listing would significantly reduce the liquidity and
marketability of any ESF Shares not acquired by RBS.




12.  Inducement agreement



ESF has agreed to pay RBS a fee of up to £690,000 if any of the following
events occur:



(i)         the Board of ESF not approving, failing to recommend or
withdrawing or materially amending its recommendation of the Offer; or



(ii)       an announcement being made by a third party which is not acting in
concert with RBS of (a) an intention to make an offer (whether or not subject
to pre-conditions) for ESF or (b) any other proposal to ESF or ESF
Shareholders involving, in either case, a change of control of ESF and such
offer or proposal subsequently becoming or being declared unconditional in all
respects or being completed and the Offer lapsing or being withdrawn as a
result or primarily as a result of such offer or proposal.



ESF has also granted a period of exclusivity to RBS until 8 October 2001.  If
ESF breaches this exclusivity arrangement, ESF will become liable to pay
liquidated damages to RBS in the amount of £750,000.



13.  Financial and other information



Financial and other information relating to each of RBS and ESF will be set
out in the Offer Document.



As at 10 August 2001, Adam & Company Investment Management Limited, a
wholly-owned subsidiary of RBS, held 10,500 ESF Shares, representing
approximately 0.1 per cent. of the entire issued ordinary share capital of
ESF.



Save as disclosed in this announcement, neither RBS nor any of the directors
of RBS nor, so far as RBS is aware, any party acting in concert with RBS, owns
or controls any ESF Shares or holds any options to purchase ESF Shares or
holds any derivatives referenced to ESF Shares.  In the interests of
confidentiality prior to this announcement, RBS has not made enquiries in this
respect of certain of the parties who may be deemed by the Panel to be acting
in concert with RBS for the purposes of the Offer.



14.  General



The conditions and certain further terms to which the Offer will be subject or
as may be required to comply with the provisions of the Code are set out or
referred to in Appendix I of this announcement and will be set out in full in
the Offer Document and related Form of Acceptance.  The bases and sources used
in this announcement are outlined in Appendix II.  Appendix III contains
definitions of certain terms used in this announcement.  The Offer Document
and the Form of Acceptance will be despatched to ESF Shareholders in due
course.



The availability of the Offer to ESF Shareholders who are not resident in the
UK may be affected by the laws of the relevant jurisdiction.  ESF Shareholders
who are not resident in the UK should inform themselves about and observe any
applicable requirements.


Enquiries:


The Royal Bank of Scotland Group plc
Fred Watt, Group Finance Director                     Tel:     [phone]
Anthony Frost, Head of Public Relations,              Tel:     [phone]  
Corporate Banking and Banking and Financial Markets   Mob:     [phone]
                                                               

Hawkpoint Partners Limited (financial adviser to 
The Royal Bank of Scotland Group plc)
Charles Williams                                      Tel:     [phone]
Graham Paton

Euro Sales Finance plc
Colin Rutherford                                      Tel:     [phone]

Deutsche Bank AG London (financial adviser 
to Euro Sales Finance plc)
Antony Macwhinnie                                     Tel:     [phone]



The availability of the Offer to persons not resident in the United Kingdom
may be affected by the laws of the relevant jurisdiction.  Persons who are not
resident in the United Kingdom should obtain advice and observe any applicable
requirements.  The Offer is not being made, directly or indirectly, in or
into, or by use of the mails, or by any other means or instrumentality
(including, without limitation, facsimile transmission, electronic mail, telex
or telephone) of interstate or foreign commerce, or of any facility of a
national securities exchange, of the United States, Canada, Australia, the
Republic of Ireland or Japan, and the Offer will not be capable of acceptance
by any such means, instrumentality or facility or from within the United
States, Canada, Australia, the Republic of Ireland or Japan.  Accordingly,
copies of this announcement and any other documents related to the Offer are
not being, and must not be, mailed or otherwise distributed or sent in or into
the United States, Canada, Australia, the Republic of Ireland or Japan and
persons receiving such documents (including custodians, nominees and trustees)
must not distribute or send them in, into or from such jurisdictions.



This announcement does not constitute an offer or an invitation to purchase or
subscribe for any securities.



Hawkpoint Partners Limited, which is regulated in the United Kingdom by The
Securities and Futures Authority Limited, is acting exclusively for RBSG and
no-one else in connection with the Offer and will not be responsible to anyone
other than RBSG for providing the protections afforded to customers of
Hawkpoint Partners Limited nor for giving advice in relation to the Offer.



Deutsche Bank AG London, which is regulated in the United Kingdom by The
Securities and Futures Authority Limited, is acting exclusively for ESF and
no-one else in connection with the Offer and will not be responsible to anyone
other than ESF for providing the protections afforded to customers of Deutsche
Bank AG London nor for giving advice in relation to the Offer.



This announcement has been approved by Hawkpoint Partners Limited solely for
the purposes of section 57 of the Financial Services Act 1986.




APPENDIX I



Conditions and certain further terms of the Offer

The Offer, which will be made by Hawkpoint on behalf of RBS, will comply with
the Listing Rules of the UK Listing Authority, the rules and regulations of
the London Stock Exchange and the Code, will be governed by English law and
will be subject to the terms and conditions to be set out in the Offer
Document and related Form of Acceptance.

Part A: Conditions of the Offer

The Offer will be subject to the following conditions:

(a)                valid acceptances being received (and not, where permitted,
withdrawn) by not later than 3.00pm (London time) on the First Closing Date
(or such later time(s) and/or date(s) as RBS may, with the consent of the
Panel or in accordance with the Code, decide) in respect of not less than 90
per cent. (or such lower percentage as RBS may decide) in nominal value of ESF
Shares to which the Offer relates, provided that this condition shall not be
satisfied unless RBS and/or any of its subsidiaries shall have acquired or
agreed to acquire, whether pursuant to the Offer or otherwise, ESF Shares
carrying in aggregate more than 50 per cent. of the voting rights then
normally exercisable at general meetings of ESF.  For the purposes of this
condition:

(i)                  shares which have been unconditionally allotted but not
issued before the Offer becomes or is declared unconditional as to
acceptances, whether pursuant to the exercise of any outstanding subscription
or conversion rights or otherwise, shall be deemed to carry the voting rights
they will carry on being entered into the Register of Members of ESF; and

(ii)                the expression 'ESF Shares to which the Offer relates'
shall be construed in accordance with sections 428 to 430F of the Act;

(b)               the Office of Fair Trading indicating, in terms reasonably
satisfactory to RBS, that the Secretary of State for Trade and Industry does
not intend to refer the proposed acquisition of ESF or any matter relating
thereto to the Competition Commission;

(c)                save as disclosed to RBS or its advisers by ESF or its
advisers prior to the time of this announcement, there being no provision of
any agreement, arrangement, licence, permit or other instrument to which any
member of the wider ESF Group is a party or by or to which any such member or
any of its assets may be bound, entitled or subject, which in consequence of
the Offer or the proposed acquisition of any shares or other securities in ESF
or because of a change in the control or management of ESF or otherwise, could
or might result (to an extent which would have a material adverse effect on
the wider ESF Group taken as a whole) in:

(i)                  any moneys borrowed by, or any other indebtedness (actual
or contingent) of, or grant available to any such member, being or becoming
repayable or capable of being declared repayable immediately or earlier than
their or its stated maturity date or repayment date or the ability of any such
member to borrow moneys or incur any indebtedness being withdrawn or inhibited
or being capable of becoming or being withdrawn or inhibited;

(ii)                any such agreement, arrangement, licence, permit or
instrument or the rights, liabilities, obligations or interests of any such
member thereunder being terminated or modified or affected or any obligation
or liability arising or any action being taken thereunder;

(iii)               any assets or interests of any such member being or
falling to be disposed of or charged or any right arising under which any such
asset or interest could be required to be disposed of or charged otherwise
than in the ordinary course of business;

(iv)              the creation or enforcement of any mortgage, charge or other
security interest over the whole or any part of the business, property or
assets of any such member;

(v)                the rights, liabilities, obligations or interests of any
such member in, or the business of any such member with, any person, firm or
body (or any arrangement or arrangements relating to any such interest or
business) being terminated, adversely modified or affected;

(vi)              the financial or trading position or prospects of any such
member being prejudiced or adversely affected;

(vii)             any such member ceasing to be able to carry on business
under any name under which it presently does so; or

(viii)           the creation of any liability, actual or contingent, by any
such member otherwise than in the ordinary course of business;

and no event having occurred which, under any provision of any agreement,
arrangement, licence, permit or other instrument to which any member of the
wider ESF Group is a party or by or to which any such member or any of its
assets may be bound, entitled or subject, is reasonably likely to result in
any of the events or circumstances as are referred to in sub-paragraphs (i) to
(viii) of this paragraph (c);

(d)               no government or governmental, quasi-governmental,
supranational, statutory, regulatory, environmental or investigative body,
court, trade agency, association, institution or any other body or person
whatsoever in any jurisdiction (each a 'Third Party') having decided to take,
institute, implement or threaten any action, proceeding, suit, investigation,
enquiry or reference, or enacted, made or proposed any statute, regulation,
decision or order, or having taken any other steps which would or might
reasonably be expected (to an extent which would have a material adverse
effect on the wider ESF Group) to:

(i)                  require, prevent or delay the divestiture, or alter the
terms envisaged for any proposed divestiture by any member of the wider RBS
Group or any member of the wider ESF Group of all or any portion of their
respective businesses, assets or property or impose any limitation on the
ability of any of them to conduct their respective businesses (or any of them)
or to own any of their respective assets or properties or any part thereof;

(ii)                require, prevent or delay the divestiture by any member of
the wider RBS Group of any ESF Shares or other securities in ESF;

(iii)               impose any limitation on, or result in a delay in, the
ability of any member of the wider RBS Group directly or indirectly to acquire
or to hold or to exercise effectively any rights of ownership in respect of
shares or loans or securities convertible into shares or any other securities
(or the equivalent) in any member of the wider ESF Group or the wider RBS
Group or to exercise management control over any such member;

(iv)              otherwise adversely affect the business, assets, profits or
prospects of any member of the wider RBS Group or of any member of the wider
ESF Group;

(v)                make the Offer or its implementation or the acquisition or
proposed acquisition by RBS or any member of the wider RBS Group of any shares
or other securities in, or control of ESF void, illegal, and/or unenforceable
under the laws of any jurisdiction, or otherwise, directly or indirectly,
restrain, restrict, prohibit, delay or otherwise materially interfere with the
same, or impose additional conditions or obligations with respect thereto, or
otherwise challenge, hinder or interfere therewith;

(vi)              require any member of the wider RBS Group or the wider ESF
Group to offer to acquire any shares or other securities (or the equivalent)
or interest in any member of the wider ESF Group or the wider RBS Group owned
by any Third Party;

(vii)             impose any limitation on the ability of any member of the
wider ESF Group to co-ordinate its business, or any part of it, with the
businesses of any other members; or

(viii)           result in any member of the wider ESF Group ceasing to be
able to carry on business under any name under which it presently does so;

and all applicable waiting and other time periods during which any such Third
Party could decide to take, institute, implement or threaten any action,
proceeding, suit, investigation, enquiry or reference or any other step under
the laws of any jurisdiction in respect of the Offer or the acquisition or
proposed acquisition of any ESF Shares having expired, lapsed or been
terminated;

(e)                all necessary filings or applications having been made in
connection with the Offer and all statutory or regulatory obligations in any
jurisdiction having been complied with in connection with the Offer or the
acquisition by any member of the wider RBS Group of any shares or other
securities in, or control of, ESF and all necessary authorisations, orders,
recognitions, grants, consents, licences, confirmations, clearances,
permissions and approvals for the proposed acquisition of any shares or other
securities in, or control of, ESF by any member of the wider RBS Group having
been obtained in terms and in a form reasonably satisfactory to RBS from all
appropriate Third Parties or persons with whom any member of the wider ESF
Group has entered into contractual arrangements and all such authorisations,
orders, recognitions, grants, consents, licences, confirmations, clearances,
permissions and approvals together with all authorisations, orders,
recognitions, grants, licences, confirmations, clearances, permissions and
approvals necessary or appropriate to carry on the business of any member of
the wider ESF Group remaining in full force and effect and all filings
necessary for such purpose having been made and there being no notice or
intimation of any intention to revoke or not to renew any of the same at the
time at which the Offer becomes otherwise unconditional and all necessary
statutory or regulatory obligations in any jurisdiction having been complied
with;


(f)                except as publicly announced by ESF prior to 14 August 2001
or as set out or referred to in the ESF 2001 Results Announcement (or as
disclosed to RBS or its advisers by ESF or its advisers prior to the time of
this announcement), no member of the wider ESF Group having, since 30 June
2000:

(i)                  save as between ESF and wholly-owned subsidiaries of ESF
or for ESF Shares issued pursuant to the exercise of options granted under ESF
Share Schemes, issued,  authorised or proposed the issue of additional shares
of any class;

(ii)                save as between ESF and wholly-owned subsidiaries of ESF
or for the grant of options under ESF Share Schemes, issued or agreed to
issue, authorised or proposed the issue of securities convertible into shares
of any class or rights, warrants or options to subscribe for, or acquire, any
such shares or convertible securities;

(iii)               other than to another member of the ESF Group,
recommended, declared, paid or made or proposed to recommend, declare, pay or
make any bonus, dividend or other distribution whether payable in cash or
otherwise;

(iv)              save for intra-ESF Group transactions, transactions in the
ordinary course of business and/or transactions which are not material in the
context of the wider ESF Group taken as a whole, merged or demerged with any
body corporate or acquired or disposed of or transferred, mortgaged or charged
or created any security interest over any assets or any right, title or
interest in any asset (including shares and trade investments) or authorised
or proposed or announced any intention to propose any merger, demerger,
acquisition or disposal, transfer, mortgage, charge or security interest;

(v)                save for intra-ESF Group transactions, made or authorised
or proposed or announced an intention to authorise or to propose any change in
its loan capital;

(vi)              issued, authorised or proposed the issue of any debentures
or (save for intra-ESF Group transactions) incurred or increased any
indebtedness or become subject to any contingent liability otherwise than in
the ordinary course of business which is material in the context of the wider
ESF Group taken as a whole;

(vii)             purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities or reduced
or, save in respect to the matters mentioned in sub-paragraph (i) above made,
any other change to any part of its share capital;

(viii)           implemented, or authorised, proposed or announced its
intention to implement, any reconstruction, amalgamation, scheme, commitment
or other transaction or arrangement otherwise than in the ordinary course of
business;

(ix)              entered into or changed the terms of any contract with any
director of ESF or varied or permitted a variation in the terms or rules
governing the ESF Share Schemes;

(x)                entered into or varied or authorised, proposed or announced
its intention to enter into or vary any contract, transaction or commitment
(whether in respect of capital expenditure or otherwise) which is of a long
term, onerous or unusual nature or magnitude or otherwise than in the ordinary
course of business or which is or could be materially restrictive on the
businesses of any member of the wider ESF Group or the wider RBS Group, and
which involves or could involve an obligation of such a nature or magnitude in
each case which is material in the context of the wider ESF Group taken as a
whole;

(xi)              proposed any voluntary winding-up of a material subsidiary
of ESF;

(xii)             taken any corporate action or had any legal proceedings
started or threatened against it for its winding-up, dissolution or
reorganisation or for the appointment of a receiver, administrative receiver,
administrator, trustee or similar officer of all or any of its assets or
revenues or any analogous proceedings in any jurisdiction or had any such
person appointed in each case which is material in the context of the wider
ESF Group;

(xiii)           waived or compromised any claim which is material in the
context of the wider ESF Group taken as a whole; or

(xiv)           proposed or entered into any contract, commitment, arrangement
or agreement otherwise than in the ordinary course of business or passed any
resolution or made any offer (which remains open for acceptance) with respect
to or announced any intention to, or to propose to, effect any of the
transactions, matters or events referred to in this condition

and, for the purposes of this condition, the term 'ESF Group' shall mean ESF
and its wholly-owned subsidiaries;

(g)               since 30 June 2000 and save as publicly announced by ESF
prior to 14 August 2001 or as set out or referred to in the ESF 2001 Results
Announcement or as disclosed to RBS or its advisers by ESF or its advisers
prior to 14 August 2001:

(i)                  no adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits of any member of
the wider ESF Group (where such adverse change is material in the context of
the wider ESF Group);

(ii)                no litigation, arbitration proceedings, prosecution or
other legal proceedings to which any member of the wider ESF Group is or may
become a party (whether as a plaintiff, defendant or otherwise) and no
investigation by any Third Party against or in respect of any member of the
wider ESF Group having been instituted announced or threatened by or against
or remaining outstanding in respect of any member of the wider ESF Group which
in any such case might reasonably be expected to materially and adversely
affect any member of the wider ESF Group;

(iii)               no contingent or other liability having arisen or become
apparent to RBS which might reasonably be expected to materially and adversely
affect the wider ESF Group; and

(iv)              no steps having been taken which are likely to result in the
withdrawal, cancellation, termination or modification of any licence held by
any member of the wider ESF Group which is necessary for the proper carrying
on of its business and which is material in the context of the wider ESF
Group;

(h)               save as set out or referred to in the ESF 2001 Results
Announcement or as disclosed to RBS or its advisers by ESF or its advisers
prior to 14 August 2001, RBS not having discovered:

(i)                  that any financial, business or other information
concerning the wider ESF Group as contained in the information publicly
disclosed at any time by or on behalf of any member of the wider ESF Group is
misleading, contains a misrepresentation of fact or omits to state a fact
necessary to make that information not misleading in each case which is
material to the wider ESF Group;

(ii)                that any member of the wider ESF Group or any partnership,
company or other entity in which any member of the wider ESF Group has a
significant economic interest and which is not a subsidiary undertaking of ESF
is subject to any liability (contingent or otherwise) which is not disclosed
in the annual report and accounts of ESF for the year ended 30 June 2000 or
the ESF 2001 Results Announcement and which is material in the context of the
ESF Group; or

(iii)               any information which materially affects the import of any
information disclosed at any time by or on behalf of any member of the wider
ESF Group; and

(i)                 no receiver, administrative receiver or other encumbrancer
having been appointed over any of the assets of any member of the ESF Group.

For the purposes of these conditions, the 'wider ESF Group' means ESF and its
subsidiary undertakings, associated undertakings and any other undertaking in
which ESF and/or such undertakings (aggregating their interests) have a
significant interest, the 'wider RBS Group' means RBSG and its subsidiary
undertakings, associated undertakings and any other undertaking in which RBSG
and/or such undertakings (aggregating their interests) have a significant
interest (and for these purposes 'subsidiary undertaking', 'associated
undertaking' and 'undertaking' have the meanings given by the Act, other than
paragraph 20(1)(b) of Schedule 4A to the Act which shall be excluded for this
purpose, and 'significant interest' means a direct or indirect interest in 10
per cent. or more of the equity share capital (as defined in that Act)) and '
ESF 2001 Results Announcement' means the preliminary statement of results of
ESF for the year ended 30 June 2001 announced by ESF on the date of this
announcement.

Subject to the requirements of the Panel, RBS reserves the right to waive, in
whole or in part, all or any of the above conditions, except condition (a).

Conditions (b) to (i) (inclusive) must be fulfilled or (if capable of waiver)
waived, or where appropriate, have been determined by RBS in its reasonable
opinion to be or to remain satisfied by midnight on the 21st day after the
date on which condition (a) is fulfilled (or such later date as the Panel may
agree). RBS shall be under no obligation to waive or treat as satisfied any of
the conditions (b) to (i) (inclusive) by a date earlier than the latest date
specified above for the satisfaction thereof, notwithstanding that the other
conditions of the Offer may at such earlier date have been waived or fulfilled
and that there are at such earlier date no circumstances indicating that any
of such conditions may not be capable of fulfilment.

If RBS is required by the Panel to make an offer for ESF Shares under the
provisions of Rule 9 of the Code, RBS may make such alterations to any of the
above conditions as are necessary to comply with the provisions of that Rule.

The Offer will lapse (unless otherwise agreed with the Panel) if the
Acquisition is referred to the Competition Commission before 3.00pm on the
First Closing Date or on the date on which the Offer becomes or is declared
unconditional as to acceptances, whichever is the later.  If the Offer lapses,
it will cease to be capable of further acceptance and accepting ESF
Shareholders and RBS shall cease to be bound by any Forms of Acceptance
delivered pursuant to the Offer.

Part B: Certain Further Terms of the Offer

The Offer will not be made, directly or indirectly, in or into, or by use of
the mails, or by any other means or instrumentality (including, without
limitation, facsimile transmission, electronic mail, telex or telephone) of
interstate or foreign commerce, or of any facility of a national securities
exchange, of the United States, Canada, Australia, the Republic of Ireland or
Japan, and the Offer will not be capable of acceptance by any such means,
instrumentality or facility or from or within the United States, Canada,
Australia, the Republic of Ireland or Japan.  Accordingly, copies of this
announcement and any other documents related to the Offer are not being, and
must not be, mailed or otherwise distributed or sent in or into the United
States, Canada, Australia, the Republic of Ireland or Japan and persons
receiving such documents (including custodians, nominees and trustees) must
not distribute or send them in, into or from such jurisdictions.

The ESF Shares to be acquired pursuant to the Offer will be acquired by RBS
fully paid, free from all liens, charges, equitable interests and encumbrances
and other third party interests together with all rights attaching thereto on
or after the date of this announcement, including the right to receive and
retain all dividends and other distributions (if any) declared, made or paid
hereafter.  The Offer will extend to any ESF Shares which are unconditionally
allotted or issued whilst the Offer remains open for acceptance (or by such
earlier date as RBS may, subject to the Code, determine such earlier date, not
(without the consent of the Panel) being earlier than the date on which the
Offer becomes unconditional as to acceptances or, if later, the First Closing
Date) as a result of the exercise of options granted under the ESF Share
Schemes or otherwise.


APPENDIX II



Bases and sources



1.          General

Unless otherwise stated:

(i)         financial information relating to RBS Group has been extracted
from its Report and Accounts 2000 and its interim results for the six months
ended 30 June 2001;

(ii)        financial information relating to RBS has been extracted from its
statutory financial statements for the 15 months ended 31 December 2000; and

(iii)      financial information relating to ESF has been extracted from its
preliminary statement of results for the year ended 30 June 2001.



2.         Share prices

The market price of an ESF Share is based on the closing middle market prices
of:

(i)         390 pence per ESF Share obtained from the Daily Official List on
13 August 2001 (the last dealing day prior to the date of this announcement);

(ii)        369 pence per ESF Share obtained from the Daily Official List on
21 June 2001 (the last dealing day prior to the announcement that ESF had
received a number of offers in excess of reported net book value as at 31
March 2001); and

(iii)      326.5 pence per ESF Share obtained from the Daily Official List on
18 April 2001 (the last dealing day prior to the announcement that the Board
of ESF was considering, inter alia, the sale of ESF).



3.         Value of the Offer

References to the value of the Offer for the entire issued ordinary share
capital of ESF are based on 15,458,538 ESF Shares currently in issue.




APPENDIX III



Definitions


'Act'        the Companies Act 1985 (as amended)

'Acquisition' the proposed acquisition of the entire issued and to be issued
              ordinary share capital of ESF by RBS pursuant to the Offer

'Australia'  the Commonwealth of Australia, its states, territories and
             possessions

'Board of    the board of directors of ESF
ESF' or 'ESF
Board'

'Board of    the board of directors of RBS
RBS' or 'RBS
Board'

'business    a day, not being a Saturday or Sunday, on which banks in the City
day'         of London are open for business

'Canada'     Canada, its provinces and territories

'Code'       the City Code on Takeovers and Mergers

'Daily       the Daily Official List of the London Stock Exchange
Official
List'

'Deutsche    Deutsche Bank AG London
Bank'

'ESF'        Euro Sales Finance plc

'ESF Group'  ESF, its subsidiaries and subsidiary undertakings

'ESF Shares' the existing unconditionally allotted or issued and fully paid
             ordinary shares of 10 pence each in the capital of ESF and any
             further ordinary shares which are unconditionally allotted or
             issued prior to the date on which the Offer closes (or such
             earlier date or dates as RBS may, subject to the Code, determine)
             including any such shares allotted or issued pursuant to the
             exercise of options granted under the ESF Share Schemes

'ESF         holders of ESF Shares
Shareholders'

'ESF Share   the ESF 1995 Approved Executive Share Option Scheme, the ESF 1997
Schemes'     Unapproved Discretionary Share Option Scheme, the ESF 1998
             Executive Share Plan, the ESF 1998 Savings Related Share Option
             Scheme and the ESF 2000 International Share Option Plan

'First       the first closing date of the Offer
Closing Date'

'Form of     the form of acceptance and authority relating to the Offer (to be
Acceptance'  despatched to ESF Shareholders with the Offer Document)

'Hawkpoint'  Hawkpoint Partners Limited

'Japan'      Japan, its cities and prefectures, territories and possessions

'London      London Stock Exchange plc
Stock
Exchange'

'NatWest'    National Westminster Bank Plc


'Offer'   the recommended cash offer to be made by Hawkpoint on behalf of RBS
          to acquire all of the ESF Shares on the terms and subject to the
          conditions to be set out in the Offer Document and the Form of
          Acceptance and including, where the context so permits, any
          subsequent revision, variation, extension or renewal of such offer

'Offer    the document to be despatched to ESF Shareholders containing the
Document' formal offer for their ESF Shares

'Official the Official List of the UK Listing Authority
List'

'Panel'   The Panel on Takeovers and Mergers

'RBS' or  The Royal Bank of Scotland plc
'Company'

'RBSG'    The Royal Bank of Scotland Group plc

'RBS      The Royal Bank of Scotland Group plc, its subsidiaries and subsidiary
Group'    undertakings

'UK' or   the United Kingdom of Great Britain and Northern Ireland
'United
Kingdom'

'UK       the Financial Services Authority in its capacity as the competent
Listing   authority for the purposes of Part IV of the Financial Services Act
Authority'1986 and in the exercise of its functions in respect of the admission
         to the Official List, otherwise in accordance with Part IV of the
          Financial Services Act 1986 (including where the context permits, any
          committee, employee, officer or servant to whom any function of the
          UK Listing Authority may, for the time being, be delegated)

'United   the United States of America, its territories and possessions, any
States'   state of the United States of America and the District of Columbia
          and all other areas subject to its jurisdiction or any political
          subdivision thereof