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The Royal Bank of Scotland Group (RBS),
founded in 1727, is the fifth largest financial services
group in the world by market capitalization* and is
one of the Fortune Global 150 companies. This broadly
based group employs over 105,000 people across its operations,
which span clearing banking, corporate banking, financial
services, investment management and insurance in the
UK, Europe, Asia and the US.
In March 2000, The Royal Bank of Scotland Group completed
the acquisition of NatWest in a £21 billion deal
that was the largest take-over in British banking history.
This gave rise to a wider Group, with a highly diversified
portfolio of activities for corporate, business and
personal customers.
The enlarged Group has a market capitalisation of nearly
of £50 billion*, compared with £19.7 billion
immediately after the acquisition of NatWest.
With an impressive AA Credit Rating, the Group has more
than 15 million customers and total assets as of December
2001 of £369 billion.
In the year to December 2001, The Royal Bank of Scotland
Group performed strongly, driven by higher income and
improvements in efficiency in each of its businesses.
Profit before tax, goodwill amortisation and integration
costs was up 32% in the year to 31 December 2001, while
shareholders received a total return of 70% over the
two years to 31 December 2001.
The Royal Bank of Scotland Group enjoys leading positions
in the UK across a range of different areas:
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number one in the UK in corporate
and commercial banking
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number one for small business customers
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number one in UK offshore banking
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number one in private banking
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number one provider of telephone motor
insurance
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number two in UK credit cards
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In addition to the full range of banking
services it offers under The Royal Bank of Scotland
and NatWest brands, the Group includes other organisations
well known in financial circles:
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Lombard, the asset finance arm of
RBS, is a leading provider of business asset finance
solutions for virtually any type of operating asset.
Lombard is the largest provider of asset finance
to the UK corporate market and has assets of approximately
£17bn. It is in the process of building a
significant asset finance business in the US.
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Ulster Bank in Northern Ireland,
which also has a very strong presence in the Republic
of Ireland.
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Coutts Group, the international operator
in the private banking sector, managing the portfolios
of 70,000 wealthy customers via its 38 offices throughout
the world.
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Direct Line, one of the major direct
motor insurance operators and a leading provider
of financial services by telephone in the UK, Spain,
Italy and Germany.
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Citizens Financial Group, based in
Rhode Island (USA), the second largest bank in New
England. Citizens recently completed the £1.38bn
billion acquisition of the retail banking operation
of Mellon Bank, the third largest bank in Pennsylvania.
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The Royal Bank of Scotland Group is committed to creating
"strategic options" for its future growth,
which will deliver exceptional value for its share-holders,
customers and staff.
Our philosophy is to "make it happen" for
our customers, staff and shareholders. The strong growth
in customer numbers, improvement in customer service
levels and higher than expected benefits from the acquisition
of NatWest have all contributed to the excellent recent
performance.
Corporate Banking and Financial Markets (CBFM) serves
one third of the British market in corporate banking,
and has banking relationships with eighty FTSE 100 and
over two hundred FTSE 250 companies. In the U.S., CBFM
has relationships with over 50% of the Fortune 100.
CBFM operates in eleven countries and employs 13,000
staff. Through established relations with over 2,500
other banks it has a presence in 140 countries, which
includes offices in Italy, France, Germany, Spain, Greece
and the U.S.
CBFM provides companies and financial institutions with
a combination of readily available capital and relationship
banking, allied to the ability to originate, structure
and finance transactions. In 2001 CBFM made a contribution
of over £3,011m, up 10% on the previous year.
CBFM’s European services are targeted to:
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Large companies, in the private and
public service sectors
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Private equity funds
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Institutional investors
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Banks and insurance companies
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In the last 10 years, RBS has expanded
its corporate banking operations internationally, particularly
in those businesses where it has already earned acknowledged
leadership in the UK.
This strategy has brought CBFM to many leading positions
in Europe:
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Number 1 in Leveraged Finance: In
2001, RBS was the number one arranger of European
loans for leveraged buyouts – by number and
value of loans arranged, according to data from
Dealogic.
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Number 1 in Mezzanine Finance: In
the year 2001 RBS Mezzanine was the number one arranger
of mezzanine finance for completed European buy-outs
in 2001 (source, European VC Journal Feb 2002).
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Number 1 in Project Finance: "No.1
arranger for European projects" (Project Finance,
Jan 2002); "3rd largest global arranger of
project finance loans" (Project Finance, Jan
2002).
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Number 1 in Asset Finance: where RBS
works under the Lombard brand. World-wide, Lombard
is in fifth place – the only larger banks are
American – and holds an asset portfolio of
£17bn;
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Number 1 in Private Placements: having
carried out more operations on behalf of European
corporates than any other bank, for a total value
of £1.53 bn;
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Number 1 in Sterling fixed rate securitization:
where it has been the leading bank since 1994 and
currently has a market share of 22%;
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Number 1 in Syndications: In the year
2001, RBS was the number one arranger of UK syndicated
loans and number two in Euromarket syndicated loans,
according to data from Dealogic loanware.
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Number 1 in Shipping Finance, in Greece
and in London.
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Faced with new market opportunities, corporates
have to consider more effective ways of raising funds
and review the structure of their balance sheet to improve
return on investment. In such an environment, CBFM’s
unique approach, ‘can-do’ attitude and appetite
for new business can really ‘make it happen’.
CBFM operates in many different business areas, making
good use of its capitalisation and its capacity to underwrite,
restructure and distribute credit instruments.
The Royal Bank of Scotland’s financial markets
division is one of world’s leading operators, providing
RBS and NatWest customers with access to international
capital markets. It plays a major role in private placements,
securitization, currency dealings and derivatives. Our
financial markets division has the capability to structure
credit operations for companies and institutions all
over the world.
All this is accompanied by access to immense investment
capital reserves through its relations established over
many years with institutional investors and pension
funds worldwide.
The range of products RBS offers includes:
Our financial markets division is a leader in private
placements, having carried out more operations on behalf
of European corporations than any other bank: a total
value of £1.53bn. It is also No.1 in sterling
fixed rate securitization (and indeed has been since
1994), with a market share of 22%.
In the currency and derivatives arena, the financial
markets division has been the largest in the world in
sterling interest rate swaps for almost a decade. It
has been No. 1 in sterling cross-currency swaps since
1999, and is also a strong player in the emerging currencies.
Moreover its position in Europe is:
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No 1 in euro/sterling FX
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No 1 in short-dated euro interest
rate swaps
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No 1 in euro/sterling currency options
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No 2 in euro interest rate swaps
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No 2 in euro FRAs
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No 3 in dollar/euro FX
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No 3 in dollar/euro currency options
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The Royal Bank of Scotland's corporate banking business
makes use of its wide network of partner banks in most
countries of the world to provide cash management services
to its customers. RBS offers its customers a full-range
of products, from conventional banking services to asset
management, from syndicated loans to leveraged finance.
It also has strong links with the bank’s financial
markets division, and can offer a full range of risk
management and capital markets products.
RBS operates as a lead arranger and underwriter for
syndicated loans, project and export finance, lever-aged
and acquisition finance and property finance.
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Syndications: with its huge financial
resources, RBS can boast an underwriting capacity
that very few banking groups can rival. This has
enabled it to take pole position in the European
syndicated loans market. Behind the relationship
managers who deal with the customer and the product
specialists is a special distribution team in constant
touch with investors and in a position to draw up
best market conditions for the bank’s clients.
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Project and Export Finance: RBS is
proud of its long and widely-recognised experience
in project financing, where it also acts as an adviser
in particular industries such as energy, utilities
and infrastructure.
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Leveraged and Acquisition Finance:
through its leveraged finance unit, RBS supports
venture capital and private equity sponsored transactions;
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applying a rapid procedure for deal analysis, risk evaluation
and completion of deals. In 2001 alone, the bank's leveraged
finance division completed over 140 transactions, underwriting
£3.7bn of debt capital. RBS acts as lead arranger
of the loan package to support leveraged buyouts and
offers a range of loan products that include mezzanine
finance and high-yield bonds.
Lombard is the UK market leader in the provision of
asset finance solutions for virtually any type of business
asset - from cars, computers and industrial equipment
to aircraft, rail and maritime assets. The value of
its asset portfolio exceeds £17bn.
It is the leading provider to firms of all sizes, from
SMEs to multinationals. Flexibility is the trademark
of Lombard's approach. Lease periods and repayment schedules
are tailored to match customers' cash flow profiles
and a broad product range encompasses traditional lease
purchase, finance lease, and operating lease through
to complex, bespoke asset-based solutions. Recommended
structures, based on in-depth analysis, are always creative,
but practical.
In North America, the Lombard U.S. Equipment Finance
division was established in February 2002 and is a secured
lender providing structured, specialised financial products
to meet the equipment and growth needs of mid- to large-sized
businesses throughout the United States.
The Royal Bank has developed a broadly based property
loan portfolio in Europe encompassing offices, residential,
warehouses and hotels. Quality investors and developers
have turned to the bank for debt finance for property
transactions across Europe with a total value of over
£929m and with a range of structures including
term loans, mezzanine finance, VAT facility and guarantees.
While most transactions involve direct property acquisitions,
significant leveraged buyouts have also been financed.
Royal Bank Private Equity (RBPE) supports enterprise
through partnership and financial backing. It targets
transactions from £50m to £500 million with
key competencies in financial services, aerospace and
specialist engineering, chemical, travel and leisure,
business and support services.
In addition to RBPE, the group also includes Royal Bank
Development Capital, that targets the smaller private
equity market focusing on investments between £10
million and £20 million, and a new fund specially
devoted for technology, Royal Bank Ventures. The objective
is to support its customers with a true partnership
approach, providing the right tools for achieving their
particular targets.
Based in New York City, CBFM in the US offers Fortune
500 clients across the United States a market-leading
product range covering:
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Corporate and institutional banking
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Financial markets sales and trading
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Private placements
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Leveraged finance
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Structured finance
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Asset finance (through Lombard USA)
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Additional Royal Bank of Scotland North
American offices are located in Houston, Connecticut
(Greenwich Capital), Chicago (Greenwich Futures and
Lombard US Equipment Finance), New England (Citizens
Bank), and Miami (Coutts & Co).
If you would like further information on Royal Bank
of Scotland’s services in Europe or the United
States, please contact:
Carolyn McAdam
The Royal Bank of Scotland
Edinburgh
Tel: +44(0)131 523 2055
Alison Gillies
The Royal Bank of Scotland
New York
Tel: 212 401 3350
Market capitalization as of 1st March 2002
Exchange rates = Average £/$ exchange rate of
1.4401 for year ended 2001
E/£ and E/$ as of March 19th 2002
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