Acquisition

Royal Bank of Scotland Group PLC
03 February 2004

3rd February 2004

RBS to Acquire Credit Card Business of People's Bank of Connecticut

The Royal Bank of Scotland Group plc ('RBS') has reached agreement with People's
Bank to acquire its credit card business at a premium of $360 million (£200
million), or 15.5%, to receivables.

The credit card business of People's Bank, based in Connecticut, was established
in 1985, and has approximately 1.1 million customer accounts nation-wide, has
around $2.3 billion of receivable balances and employs 540 people. The People's
Bank portfolio is predominantly prime and super-prime in credit quality terms.

RBS currently operates one of the largest consumer finance businesses in the
world with the bulk of its operations currently based in the UK and mainland
Europe.

This acquisition is an important step for RBS giving it entry to the US credit
card market, the largest in the world. It gives RBS a credit card platform with
card issuing capability across the whole US market and the potential to mirror
the success of our Retail Direct business in the UK and Europe where we have a
competitive credit card offering and a strong consumer finance business.

People's Bank already successfully sells credit cards across the US with a focus
on California, Connecticut, New York, Florida, Texas and Pennsylvania, utilising
the multi-brand capability of its existing platform to sell a number of
different cards on behalf of its own Bank and partnerships. The existing
infrastructure is scaleable and enhances our range of options for growth in both
brands and customer numbers. As with previous acquisitions RBS will focus on
strong organic growth through the ongoing relationship with People's Bank, our
Citizens customers who will be supported from this new platform, and the wider
US market.

The transaction also brings with it the people and expertise to operate this
business in the US.

The deal will be accretive to earnings before goodwill amortisation and
integration costs in its first full year and will have minimal impact on RBS
capital ratios. It is subject to regulatory approval and is expected to be
complete by the end of the first quarter of 2004.

Fred Goodwin, Group Chief Executive of RBS said:

'RBS already operates one of the largest credit card platforms in Europe and
this tactical acquisition of a premium credit card portfolio represents a low
risk entry to the important US market positioning us well for growth.

'We have a strong track record for organic growth in our business and for
innovation in the highly competitive cards market. We are confident this
business offers an ideal platform for expansion in the US through existing
relationships and the development of other partnerships and channels, mirroring
the success we have already achieved in the UK and Europe with credit cards and
consumer finance.'



Further Information

Media:                          Carolyn McAdam - Head of Group Communications,
                                The Royal Bank of Scotland Group
                                (w)[phone]
                                (m)[phone]

Investor Relations:             Richard O'Connor - Head of Investor Relations
                                The Royal Bank of Scotland Group
                                (w) + 44 207 672 1763
                                (m) + 44 7909 873681




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