Acquisition

Royal Bank of Scotland Group PLC
29 January 2002

ROYAL BANK OF SCOTLAND ACQUISITION MAKES DIRECT LINE SECOND LARGEST DIRECT
INSURER IN ITALY

London, Milan, 29th January 2002 - The Royal Bank of Scotland Group plc's
('Royal Bank Group') insurance subsidiary, Direct Line Group Limited ('Direct
Line') is to become Italy's second largest direct insurer with the acquisition
of Royal & Sun Alliance's direct motor insurance operation in Italy 'Royal
Insurance'. Following the acquisition Direct Line will have over 300,000
customers in Italy.

Direct Line first moved into the Italian market in September 2001 with the
purchase of Allstate's motor insurance operation. The Direct Line brand with its
distinctive red telephone, was launched in Italy last week.

Commenting on the Acquisition, Fred Goodwin, Group Chief Executive of Royal Bank
Group said, 'The direct insurance market in Europe remains in its infancy. The
strength of the Direct Line brand makes it exceptionally well placed to
challenge traditional players whose products are more expensive and who do not
have the customer service ethos of Direct Line.

'We have already proved that the Direct Line model can work in Europe with Linea
Directa in Spain, now the country's largest direct insurer. This acquisition,
making us the second largest direct insurer in Italy, gives us an even stronger
platform for further growth.'

There are 32 million cars in Italy with total motor premiums worth Euro 19.9bn
annually.

The purchase is subject to final regulatory approval by the FSA and ISVAP, the
Italian Regulator.

For Further information contact
Gill Murphy, Direct Line UK                           020 8256 2157
Rossana Aniello, Direct Line Italy                    00 39 022 1725261
Jonathan Atack, Director of Investor Relations, Royal 0207 427 9574
Bank Group
Carolyn McAdam, Royal Bank Group                      0131 523 2055

                                                      07796 274968 (mobile)



This announcement and related documents 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 Royal Bank Group'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. Royal Bank Group
assumes no responsibility to update any of the forward looking statements
contained in this presentation and related documents.



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