Trading Statement

Royal Bank of Scotland Group PLC
17 December 2001



                     The Royal Bank of Scotland Group plc

                          Pre-Close Trading Up-date

The Royal Bank of Scotland Group plc ('RBSG') will be responding to analysts'
enquiries ahead of its close period for the year ending 31 December 2001.

RBSG has continued to achieve strong performance in each of its businesses
since 30 June 2001, with sustained growth in income and improvements in
efficiency as well as further substantial progress on the integration of
NatWest. Whilst deteriorating economic conditions and certain specific
customer situations have contributed to an increased bad debt charge, the
progress of the Group as a whole is such that we are confident that results
will continue to meet expectations.


Income:

Superior income growth is a particular focus of all our businesses and the
first half growth of 14 per cent in income is expected to be exceeded in the
second half.

Growth has been evident across all areas of the business, with particular
successes in adding new small business and personal accounts, Retail Direct,
Financial Markets and Direct Line.



Expenses:

Whilst we continue to incur higher expenses as we acquire customers and grow
our businesses, overall expense growth is being contained to very low levels
as a result of integration cost savings which are running well ahead of plan.

The Group cost:income ratio has improved further in the second half.



Provisions:

In the second half of 2001, we have seen a deterioration in the short term
economic outlook which, when combined with the impact of specific customer
situations, has given rise to a higher than expected bad debt charge.

Bad debt provisions arise from a continuous forward looking review of advances
to customers. Where individual circumstances indicate that the amount advanced
will not be recovered in full, provision is made for the assessed shortfall.
The level of balance sheet provisions remains at around 80 per cent of risk
elements in lending.



 Credit quality:

Overall credit quality remains strong with no material change to the
distribution by grade of our lending portfolio as compared with the position
disclosed in the interim results presentation.



Margins:

The Group net interest margin is running ahead of the level achieved in the
first half. Early action in anticipation of possible economic slowdown has led
to improved lending margins which together with the benefit of funds raised in
relation to the acquisition of Mellon has more than off-set the downward
pressure on deposit margins arising from lower interest rates.



NatWest integration:

The integration of NatWest continues to run significantly ahead of plan both
in terms of income benefits and cost savings. The speed of the integration is
such that materially greater cumulative benefit will be achieved during the
three year integration programme than was originally envisaged.

Furthermore, as indicated at the time of the interim results, we believe that
an increase in the ultimate level of the recurring cost and revenue benefits
will be achieved. A full up-date of the revised targets will be included in
our annual results announcement together with an estimate of the increased
costs associated with achieving both greater and faster integration benefits.



Mellon:

The acquisition of the Mellon Regional Franchise in the United States was
successfully completed on 1 December 2001. The early signs are extremely
encouraging, with deposit levels higher than when the acquisition was
announced in July. We enjoyed excellent co-operation from Mellon in the lead
up to completion and are therefore in a position to confirm the integration
targets that we set out at that time.



Fred Goodwin, Group Chief Executive, commented:

'All our businesses continue to build momentum, driven by strong income growth
and improving efficiency.

Credit quality remains strong, although the deterioration of the near term
economic outlook and specific customer situations have prompted us to increase
provision levels against the weaker elements of our loan book. Steps taken in
anticipation of a possible downturn have enabled us to establish the requisite
provisions whilst maintaining the strong profit growth trend evident in our
recent results.

Progress on integration continues to exceed our targets, and we look forward
to publishing our increased forecast in this area.

Whilst there is inevitably a greater degree of uncertainty about the immediate
economic outlook, we are confident that our results will continue to meet
expectations and that The Royal Bank of Scotland Group enters 2002 in good
health.'

The annual results for RBSG for the year to 31 December 2001 will be announced
on Thursday 28 February 2002.



     __________________________________END______________________________

For further information please contact:

Fred Goodwin, Group Chief Executive                    0131 556 8555

Fred Watt, Group Finance Director                      0131 556 8555

Jonathan Atack, Head of Investor Relations             0207 427 9574

Howard Moody, Group Director, Communications           0131 523 2056





This announcement contains 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 RBSG's future 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 the 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. RBSG assumes no responsibility
to update any of the forward looking statements contained in this
announcement.