Royal bank of Scotland

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Background information about the bank:

The Royal bank of Scotland was founded in 1727 in Scotland and started trading
solely there from the Scottish capital for about half a century.
First branch was successful so they expanded in Scotland by opening branches. Then
in 1874, the first office opened in London.
In the 20th century, there was rapid expansion and there was domestic and overseas
growth. They acquired several English banks like Williams Deacon's Bank, Glyn,
Mills & Co and Drummonds Bank. Then in the 1950s their mobile banks began
serving rural communities, and by 1960 their first office opened in New York. In
1969 they merged with National Commercial Bank of Scotland because they wanted
to have a bigger market share in Scotland. They also introduced the daisy wheel
brand mark which remains so central to their corporate identity.
Regarding their technology and diversification, they tried computerisation and
introduced a new generation of multi-function cash dispensers in the 1970s. In the
1980s they launched Direct Line motor insurance and bought Citizens Financial
Group in the USA. By the 1990s we were leading the technology of telephone and
internet banking.
Then for their takeovers and acquisitions, in 2000, they acquired National
Westminster Bank and this can be said to be the biggest takeover in banking ever in
Britain and thus through this National Westminster Bank they have gotten more
than 200 banks that had made up NatWest. Then in 2005 they formed a strategic
partnership with Bank of China and in 2007, the biggest takeover in banking history,
they led a unique consortium with Fortis, and Banco Santander to acquire the Dutch
bank ABN AMRO. ABN AMBRO had been here in Singapore since 1858, so it means
it makes RBS the oldest foreign bank here today.

Why they wanted to take over ABN amro

The consortium led by RBS that bought over ABN amro for 70 billion euros includes
Fortis and Banco Santander and they agreed to carve up ABN AMRO's assets around
the world because they felt that stating that the current stock price didn't reflect the
true value of the underlying assets of ABN amro. RBS paid about 10 billion pounds
for its portion, mainly investment banking business and and its Asian operations
because they believe that it would do them good and become the world's fifth largest
banking group. Although it is like a challenge through the recent market downturn,
they are hoping that they will recover within three to five years from the integration
of ABN Amro assets which were responsible in damaging the bank's balance sheet.
They also aimed to create a leading retail, corporate and institutional bank in Asia.

Problems they are facing currently

They have suffered a few setbacks.
During 2008's credit crisis, they had the biggest loss in UK banking history after
taking a hit of almost 6 billion from the credit crisis. Even so, they were expected to
be losing more aftermath and in 2009, they reported to have the largest annual loss
in UK corporate history. RBS announced that its 2008 loss totalled 24.1bn
($34.2bn), the largest in UK corporate history. The purchase of the Dutch bank ABN
Amro had already cost them 16.2bn.
RBS also came under fire after it emerged its former boss Sir Fred Goodwin was
already drawing a pension of 650,000 a year.
Due to the global economic downturn, The Royal Bank of Scotland announced that it
would halve its funding of British sport in 2009 which also weakened their
commercial advertising for themselves.

STEPS TAKEN TO COUNTER THE RECESSION.

Even after they lost so much money, they still wanted to inject 325 billion into
raising the ownership of the the Britain's stake to 95 percent since it was initially only
70 percent owned by the government. This move was to be insured for any further
loses.
In June 2008 RBS sold the subsidiary Angel Trains for 3.6 billion as part of a 10
billion assets sale to raise cash.
In late October 2008 it was reported that the insurance company Swiss Re and
venture-capital firm CVC Capital Partners were to purchase the insurance division

for a reported 6 billion which would reduce some of the funds needed from the
Treasury.
They also had a tax avoidance department, which had helped it avoid 500m of tax
by channelling billions of pounds through securitized assets in tax havens such as the
Cayman Islands.
In September 2009, RBS and Natwest announced dramatic cuts in their overdraft
fees. The unpaid item fee was reduced to 5 from 38 and the card misuse fee was
reduced from 35 to 15. Meanwhile, the monthly maintenance charge for going
overdrawn without consent is down from 28 to 20. The fees are estimated to earn
current account providers about 2.6bn a year. This is a step in the right direction
and a victory for consumer pressure.
They also have a planning and foresight,

Our aspiration:
We should again become one of the world's premier financial institutions, anchored
in the UK but serving institutional customers here and globally, and doing it well.

We will achieve this by:

Focusing our activities on serving enduring customer franchises, with top tier
competitive positions where we choose to compete.

Targeting 15%+ return on equity in our business.

Achieving primarily organic growth at rates consistent with the markets in

which
our businesses operate.

Using proportionately our balance sheet, funding and risk.

Having businesses that reinforce each other with shared products, customers
and expertise.

Our approach will entail:

A purposeful management style.

Making it happen for our customers and then for our shareholders.

A strategic understanding of our businesses and a focus on long-term quality

profitability.

A business mix more biased than before to stable customer businesses.

Aiming to rely less on volatile, unsecured wholesale funding.

Strategic Plan:
We have embarked on a sweeping restructuring of the Group.