Acquisition

Royal Bank of Scotland Group PLC
03 August 2004


RBS TO EXTEND MERCHANT ACQUIRING CAPABILITY WITH ACQUISITION OF LYNK SYSTEMS INC
                                     IN US

The Royal Bank of Scotland Group plc ('RBS') has reached agreement to acquire
Lynk Systems Inc ('Lynk') a US based merchant acquiring business for a total
consideration of $525 million (£288 million). RBS is currently the third largest
merchant acquirer globally.

Lynk, which is based in Atlanta, was established in 1991 as a full service
merchant acquirer processor for small and medium sized retail businesses. It is
the sixth largest non-bank acquirer and the ninth largest acquirer of credit and
debit card transactions in the US market. It has increased transaction volumes
by over 50% since 2001 to 282 million in 2003. It employs over 500 people at its
headquarters in Atlanta and also has a national network of over 350 sales
employees.

This acquisition is an important step for RBS giving it merchant acquiring
capability in the largest card payments market in the world. Lynk has
experienced rapid growth enabled by a competitive product proposition and
excellent customer service. Lynk has a highly regarded management team which is
enthusiastic about the future growth prospects for this business within the RBS
Group and the potential to leverage this growth from the strength of its
corporate and business banking customer base.

As with previous acquisitions, RBS will focus on delivering strong organic
growth. In the US this will further leverage the merchant base of Citizens
Financial Group. The strength of the RBS balance sheet and corporate banking
customer base in the US will present the opportunity to extend the offering of
Lynk to large corporate and national customers. The Lynk platform is scalable
and capable of supporting all of RBS's merchant acquiring needs within the US.

The acquisition is expected to exceed the Group's normal hurdle rate and will be
accretive to earnings before goodwill amortisation and integration costs in its
first full year. It will have minimal impact on RBS capital ratios. The deal is
subject to regulatory approvals and is expected to complete in the third quarter
of 2004. The acquisition will be funded from existing resources.

Sir Fred Goodwin, Group Chief Executive of RBS said:

'RBS is the world's third largest merchant acquirer and this is a logical, low
risk step for us into the world's largest credit card payments market. Citizens
has a strong business customer base which gives us the opportunity for strong
organic growth for Lynk. This along with the scalability and flexibility of
Lynk's platform, and the synergies which we will deliver will give additional
value for our shareholders.'

Edward R. Uzialko, Lynk's Founder and Chief Executive Officer said:

'We are delighted to become part of such a highly regarded world class company.
The Lynk management team and I are enthusiastic about the future growth
prospects and the potential to leverage the strengths of the RBS Group, enabling
Lynk to be a significant player in the US marketplace.'

3rd August 2004

For Further Information

Richard O'Connor, Investor Relations

Tel: [phone] Mob: [phone]

Carolyn McAdam, Media Relations

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