AGM Statement

Royal Bank of Scotland Group PLC
25 April 2007

The Royal Bank of Scotland Group plc AGM Statement

25 April 2007

The Meeting will deal with the proposed Resolutions as outlined in the Notice of
Meeting issued to Shareholders dated 16 March 2007 and will provide a summary of
the business and financial performance of the Group in 2006.

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

'I am pleased to say that in 2006, the Group once again demonstrated its
inherent strength and breadth, achieving impressive growth and capital
generation, enabling us to increase the dividend by 25 per cent and raise our
payout ratio to 45 per cent.'

'During the year, I have travelled widely across the Group, meeting with many
employees, customers and shareholders in Europe, the US and in Asia-Pacific.  I
have been deeply impressed with the RBS colleagues I have met and have found our
businesses to be in good health, growing strongly, and making significant impact
in the markets in which they operate.'

'Income rose from just over £25.5 billion to just over £28 billion, an increase
of 10 per cent over the course of the year.'

'Group operating profit rose by £1.16 billion to £9.4 billion and after tax and
other deductions resulted in £6.2 billion of profit attributable to our
shareholders.'

'Earnings per share grew 14 per cent, in line with our operating profit to a
round £2 per share.  The Tier 1 ratio was maintained in the middle of the 7-8
per cent range that we had previously set as our target.  And our return on
equity rose from 18.2 per cent to 19 per cent, reflecting strong profit
generation and capital efficiency.'

'The Board have recommended an increase of 25 per cent in the dividend, and this
follows the 25 per cent increase in dividend you approved last year.  Indeed,
the Group has established a long track record of very strong dividend growth.
If approved, this will be the 14th consecutive year in which our dividend has
increased by 15 per cent or more.'

'In reaching their recommendation the Board took account of a number of factors,
including, the strong capital-generative nature of our activities, and very
importantly, the opportunities for growth in our businesses.   This 25 per cent
increase in dividend will bring our  pay-out ratio to 45 per cent, up from 41
per cent last year.  The Board considers this ratio to be appropriate for the
Group's current circumstances.'

'All of the Divisions contributed to our income growth of 10 per cent, with a
particularly good result in Corporate Markets.  Once again we saw somewhat
faster growth internationally, with income up 11 per cent compared to growth in
the UK of 9 per cent.'

'Net interest income rose by 7 per cent to £10.6 billion, and our net interest
margin at 2.47 per cent was slightly better than expectations.'

'Non-interest income grew by 11 per cent to £17.4 billion and now accounts for
62 per cent of Group income, up a percentage point from this time last year.'

'With income up 10 per cent, we held our costs growth to just 8 per cent.  The
emphasis here was investment in direct expenses in those customer facing
businesses with strong income growth potential while maintaining good cost
discipline in our bank office activities.  We have, for example, expanded our
corporate business in the US, increased our team of financial planning managers
by 25 per cent in the UK and recruited experienced private bankers in Asia.'

'The cost:income ratio for the Group improved further to 42.1 per cent.'

'We are delivering strong organic growth without overstretching our balance
sheet or our risk envelope. Credit metrics have remained stable and the return
on equity has increased to 19 per cent.'

'The Group has performed well in 2006, so let me now say a few words about the
Group's prospects for growth in the future.'

'Our view of the economic backdrop is positive and we anticipate continued
growth in the world economy, and that provides a favourable environment for our
businesses.'

'Our income doesn't come from one market, and that has positioned us to deliver
sustained growth even when some of our divisions face headwinds in their
businesses, as was the case last year for RBS Insurance, Retail Markets and
Citizens.'

'Our view is that the headwinds are abating somewhat in these areas, so we look
forward to continuing growth.'

'Our income doesn't come from one geography, either. In fact, 42 per cent of our
operating profit now comes from outside the UK.'

'The growth in our income outside the UK reflects in particular the powerful
performance of our Corporate Markets business in the US and Europe. You will
notice, too, our achievements in Asia-Pacific, where we have started in recent
years to invest significantly in both Corporate Markets and Wealth Management.'

'That is what we have achieved on our own in Asia.  But we have also made good
progress in developing our partnership with Bank of China.'

'Our joint credit card business has already issued over 1.2 million credit
cards.

In addition, we have agreed to expand the scope of our joint business to include
all credit cards and merchant acquiring in Mainland China.  Our new joint
private banking initiative opened for business in Beijing and Shanghai last
month.  And together we have completed a number of significant transactions in
shipping, aviation and trade finance.  All in all, a very good start.'

'Of course a crucial requirement for growth is to have the capital strength to
support it and I'm happy to report that our capital ratios remain right in the
middle of our target range.'

'We will continue to invest in our businesses, but as we have said before, our
activities are strongly capital-generative.  This has allowed us to return a
significant amount of capital to you, our shareholders, through dividend and
share repurchase.  The indication we have received from you is that your
preference is for this capital to be returned in the form of dividends and this
is reflected in the 25 per cent increase in this year's dividend.'

'Our goal as a Group is to generate superior sustainable value for our
shareholders. But to succeed in this, we must do more than deliver good
financial results - we need to manage our business in a responsible and
sustainable way.'

'In 2006 we consulted extensively with our stakeholders, and the issues that
matter most to them provide the focus for our Corporate responsibility 
strategy.'

'Customer service is central to building and developing our franchise.  RBS has
once again secured top position and NatWest is joint second among major High
Street banks for extremely satisfied customers.'

'The Group continues to hold the highest market share in UK corporate banking
and we are now the joint leader in the UK personal current account market. We
have continued to invest in customer service with more staff, better training,
improved online services and, importantly to our customers, we don't use
offshore call centres.'

'We have played a major part in financial inclusion through our commitment to
maintaining our branch network - the largest in the UK.  We have also continued
to develop our ATM network and we have the largest network of free-to-use ATMs
in the UK.'

'Our Face2Face with Finance programme has become the UK's most widely-used
financial education programme for schools.'

'Financial crime is something that weighs heavily on our customers' minds, and
it is important that our Group does everything possible to manage and reduce the
extent of crime.  We have achieved considerable success in combating fraud in
2006: our losses from internet fraud actually fell, while the industry's
internet fraud losses increased substantially.'

'It would not be possible to achieve the results we have without the tremendous
contribution made by our people, and I would like to take this opportunity to
thank them on your behalf for their continued dedication, initiative and hard
work.'

'The environment has appropriately become the focus of much attention. I am
pleased to say that with our adoption of the Equator Principles and our approach
to sustainability in all we do, RBS has established a fine reputation as a
responsibly managed company.'

'The driving force behind everything we do in our communities comes from our
people.'

'In 2006 over 25,000 employees in the UK took part in our employee giving
programmes, including the Give As You Earn scheme and the Community Cashback
awards, generating more than £12 million for over 8,000 charities and good
causes.

'In the United States, Citizens contributed $27 million to 4,500 non-profit
organisations in 13 states.'

'2006 was another year of excellent performance by our Group with customer
satisfaction high and good returns to shareholders.'

'The Group has continued to perform well in the first few months of this year in
line with the comments which we made at the full year results presentation on 28
February.'

'When your Company is capable of producing this kind of performance, some of you
may be wondering why we should be considering a possible transaction with ABN
AMRO.  When Barclays and ABN AMRO announced their intention to merge, it was
clearly the Board's fiduciary duty to consider what the possible implications of
such a move might be for our Company.'

'After careful consideration, we made an announcement earlier today outlining
the proposals we and our good friends Fortis and Santander have collectively
made to ABN AMRO.  These proposals, which are subject to a number of conditions,
we believe are superior for ABN AMRO's shareholders and are straightforward from
a shareholder, regulatory and execution perspective.  Your Board is confident
that a transaction based on these proposals would create value for our own
shareholders and enhanced growth prospects for our own businesses.'

'We have not rushed lightly into this, but an opportunity that fits so closely
with our strategic priorities does not arise often, and it would have been
irresponsible of us not to explore such an opportunity to the full.  You can
rest assured that any offer, if made, will have been carefully evaluated.  The
Board will act prudently but with great determination, and will only proceed if
it is in the best interests of our shareholders to do so.'


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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