RNS Number:9688S
Royal Bank of Scotland Group PLC
08 December 2003


The Royal Bank of Scotland Group plc

Pre-close Trading Up-date



The Royal Bank of Scotland Group (RBS) will be holding discussions with analysts
and investors ahead of its close period for the year ending 31 December 2003.
This statement sets out the information that will be covered in those
discussions.

RBS has continued to make good progress in 2003. Key features of its results,
which will be released on Thursday 19 February 2004, are expected to include
strong income growth, a further improvement in efficiency, and provisions in
line with guidance given at the interim results presentation in August. The
Group is fully on track to meet market expectations for 2003.

Income and Margins

RBS has maintained strong momentum in its organic income growth in the second
half.

The Group continues to achieve good growth in assets across a number of sectors.
The Group net interest margin for the full year is expected to be in line with
the guidance given at the interim results presentation.

Strong growth in non-interest income has been supported by good performances in
general insurance, credit cards and corporate banking fee income.

As expected, dealing profits relating to our role in originating mortgage-backed
securities in the United States have reduced from the very strong levels in the
first half achieved as a result of record levels of mortgage refinancing.
Overall dealing profits in the second half, which come principally from
servicing customer demand for foreign currency and interest rate protection
products, are however expected to show continued underlying momentum and an
increase over the prior year.

Expenses

Growth in income continues to exceed the growth in expenses necessary to support
increased business volumes. A further improvement in the Group cost:income ratio
is expected, even after costs associated with various investment initiatives
that will improve efficiency further in the future.

Credit Quality and Provisions

Credit quality remains strong, and the charge for bad debts continues at a level
consistent with that reported in the first half and the growth in the loan book.

The credit environment remains positive, continuing to improve in corporate
lending and remaining stable in consumer and small business lending.

Acquisitions and Disposals

During 2003, the Group announced eight acquisitions, with a total consideration
in excess of #2.6bn.

The acquisition of Churchill Insurance Group was announced on 11 June. On 1
September, RBS completed the acquisition of Churchill and formed RBS Insurance
division, combining Direct Line and Churchill. The performance of Churchill and
its integration are on track.

On 6 October, RBS announced the acquisition of First Active, in Ireland. This
transaction has now been approved by the relevant regulatory and competition
authorities and is in the final stages of the shareholder approval process.
Completion is expected in January 2004.

Citizens announced the acquisition of Port Financial Corp on 17 April and
completed this acquisition on 31 July, and announced the acquisition of
Community Bancorp on 30 July and completed it on 31 October. Both these banks
are in New England. A further acquisition, of Roxborough Manayunk Bank in
Pennsylvania, was announced on 22 September and is expected to be completed in
the first quarter of 2004.

RBS also completed the purchase of Nordisk Renting on 2 June, the purchase of
the credit card and personal loans portfolios of Santander Direkt Bank on 31
July, the purchase of Bank von Ernst by Coutts Bank (Switzerland) on 28
November, and the sale of Coutts Miami on 31 July.

Capital

The final additional value share ("AVS") payment of #1.5bn was made on 1
December. The AVSs were issued to all ordinary shareholders in RBS following the
acquisition of NatWest in March 2000, since when a total of #2.7 billion has
been returned to shareholders by this means.

Underlying capital generation has again been strong and despite the acquisitions
mentioned above and the final AVS payment, our capital ratios are expected to
remain comfortably within our target ranges.

Fred Goodwin, Group Chief Executive, commented:

"With good momentum continuing across our businesses, we are on track to deliver
strong organic growth in income and improving efficiency again this year. Also,
the various acquisitions which we have made, across a range of businesses and
geographies, give us additional opportunities to grow income in the future."

"The prospects for continued income growth are further enhanced by the diversity
of our income streams. The fact, for example, that only 10% of our income is net
interest income from UK consumer lending reduces our exposure in the event of a
slow down in consumer borrowing. Equally, we are well placed to benefit from
upside potential, which is becoming evident in a number of the sectors and
markets in which we operate."


For further information please contact:

Fred Goodwin, Group Chief Executive: 0131 556 8555

Fred Watt, Group Finance Director: 0131 556 8555

Richard O'Connor, Head of Investor Relations: 0131 523 5103/0207 672 1762

Carolyn McAdam, Head of Group Communications: 0131 523 2055



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 RBS'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. RBS assumes no responsibility to update any of the forward
looking statements contained in this announcement.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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