Subsids Acquisition

ROYAL BANK OF SCOTLAND GROUP PLC
8 October 1999



DIRECT LINE AGREES TO PURCHASE GREEN FLAG, THE BREAKDOWN RECOVERY SERVICE
PROVIDER, FROM CENDANT FOR £220 MILLION

Direct Line, a wholly owned subsidiary of The Royal Bank of Scotland Group
plc, has exchanged contracts to acquire Green Flag from Cendant Corporation.
The consideration for the acquisition will be £220 million, to be paid in cash
on completion.

The acquisition is subject to regulatory approval and it is anticipated that
transfer of ownership will take place before the end of 1999.

The acquisition will be earnings accretive before goodwill amortisation in the
first full financial year after acquisition.

Sir George Mathewson, Chairman of Direct Line and Group Chief Executive of The
Royal Bank of Scotland Group, said: 'This acquisition builds value for our
shareholders by increasing our presence in a business where we are already the
fastest growing major operator.'

'Green Flag is the most efficient and cost effective operator in the industry.
Combine this with the powerful Direct Line brand for consumer direct business
and the Green Flag brand for third party business and we make a very strong
competitor to the AA and RAC.'

Green Flag is the UK's third largest roadside recovery service.  It has a
market leading position in the provision of roadside assistance through third
parties such as motor manufacturers and financial institutions.  Green Flag
has 2.5 million customers, representing 12% of the UK market, and is based in
Pudsey, near Leeds, employing 750 people.

Direct Line Rescue, Direct Line's own breakdown recovery service, has
attracted over 330,000 customers since its launch in May 1998.

Both breakdown organisations cover the UK and Europe and operate through a
network of independent garages.  Green Flag also has a commercial vehicle
breakdown response service.

BACKGROUND INFORMATION

Green Flag was founded in 1971.  Based in Pudsey near Leeds with 750 staff, it
has 2.5 million motor breakdown customers.  Green Flag underwrites its motor
breakdown and other insurance business, including warranty and travel
insurance, through its wholly owned subsidiary UK Insurance.

Cendant purchased Green Flag in May 1998 as a part of the acquisition of NPC
Limited.

On an unaudited pro-forma basis, in the twelve months ending 31 December 1998,
the businesses that Direct Line are acquiring made a profit before tax and
exceptional items of £20.2 million on a turnover of £112 million.

Direct Line was launched in 1985.  It has headquarters in Croydon, South
London, and regional centres in Glasgow, Leeds, Manchester, Birmingham and
Bristol. With around 3 million customers the product range includes motor,
motor breakdown, home, travel and pet insurance. mortgages, savings, loans ,
credit cards, pensions, investments and life assurance.  Direct Line is a
wholly owned subsidiary of The Royal Bank of Scotland Group plc.

For further information please contact:

Chris Wermann
Head of Corporate Affairs
Direct Line Group plc
Tel. [phone]