AGM Statement

Royal Bank of Scotland Group PLC
29 April 2004

The Royal Bank of Scotland Group plc

AGM Statement

29 April 2004

The meeting will deal with the proposed Resolutions as outlined in the Notice of
Meeting issued to Shareholders dated 15 March 2004, and will provide a summary
of the business and financial performance of the Group in 2003.

The following is an extract from the speech to be made by Sir George Mathewson,
Chairman, at the Meeting.

'In 2003, we increased our profit before tax, goodwill amortisation and
integration costs by 11 per cent to £7,151 million. And we increased our profit
before tax by 29 per cent, to £6,159 million.'

'In 2003, we increased our income by 14 per cent, or £2,414 million. This large
increase reflected good performance across our businesses. Over the four years
since 1999, we have increased our income by £8,164 million, or 74 per cent.
While some of our income growth came from the NatWest transaction benefits, or
from other acquisitions, the largest part of our income growth, 66 per cent,
came from organic growth across our businesses.'

'To support increased volumes across our businesses, our operating expenses rose
by 9 per cent. As a result of the relative movements in income and expenses, we
improved our cost:income ratio from 44.0 per cent in 2002 to 42.0 per cent in
2003. We believe that we can improve our efficiency further. To achieve this, we
have launched a three-year programme of initiatives across the Group. This
programme is being managed in the same way that we managed the NatWest
integration. On our current business mix, the planned programme of initiatives
would take our cost:income ratio below 40 per cent.'

'Over the last year we have completed a number of acquisitions. Each of these
acquisitions is consistent with our previously stated strategy. And some
acquisitions have been transformational for our divisions. In particular, the
acquisition of Churchill means that our new division RBS Insurance, comprising
Direct Line and Churchill, is now the second largest general insurer in the UK
and the acquisition of First Active has improved significantly Ulster Bank's
position in the Republic of Ireland.'

'Our /

'Our people are our most important asset and we owe our success to their efforts
and dedication. Profit sharing for 2003 (and for the fifth consecutive year),
amounted to 10% of salaries: we paid a total of £189 million to employees.'

'Our approach to remuneration this year is consistent with the practice of other
Banks and our previous practice. This is based on paying market competitive
rewards related to individual performance. Our overall 2003 pay awards of 3.8%
were significantly above inflation and 'best in class', that is to say, more
than any of our competitors'.

'Average earnings of £28,400 in RBS are now 10% above the UK average.

We operate a free final salary pension scheme for the majority of our
employees-1:7 of 500,000 employees in this type of scheme, in the UK. This
boosts our average earnings to £34,200 - 20% above the UK average.

Our Employee Opinion Survey to which 83% of staff respond, demonstrated their
satisfaction with pay, and was fully 12 percentage points ahead of the UK
financial services norm.

It is also relevant to our employees and our relationship with them that we have
not transferred any jobs offshore, and have no plans to do so. This
differentiates us from the vast majority of our competitors.'

'We have a major community investment programme. In 2003, we increased our
direct investment by 19% to £40 million. To give one example, we have a unique
charity giving programme where we double match monthly donations from our
employees. In 2003, £8.5 million was given to charities supported by our staff
through our staff giving and double matching programme.'

'At previous meetings, we have mentioned our strength, diversity and
flexibility. These are real qualities, evident across the Royal Bank Group. They
give us confidence that we can continue to deliver on our promises to
shareholders, and provide customers with improved service, with well rewarded
and highly motivated staff, while allowing us to make a major contribution to
the communities in which we operate. Our commitment to delivering strong organic
growth and maintaining efficiency remain unwavering.'

'We remain focussed on providing strategic options for the future which will
allow us to deliver superior returns to shareholders. In the current year, the
performance of the Group remains on track, all our integrations are on track and
our businesses continue to perform well.'





Forward Looking Statements
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 the 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. The Group assumes no responsibility to update
any of the forward looking statements contained in this announcement.


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