Capital Raising

Royal Bank of Scotland Group PLC
1 June 2001

THE ROYAL BANK OF SCOTLAND GROUP PLANS

US$300 MILLION PREFERENCE SHARE ISSUE

The Royal Bank of Scotland Group plc ('the Group') intends to issue 12 million
Category II Non-Cumulative Dollar Preference Shares to be designated Series K
('the Series K Dollar Preference Shares'), with a nominal value of US$0.1 each
which will be represented by American Depository Shares ('the Series K ADSs')
in the United States, at a subscription price of US$25.00 per share.

The Series K Preference Shares will be issued under a Form F-3 Shelf
Registration Statement which the Group has filed with the Securities and
Exchange Commission, Washington, D.C. and which provides for the offer and
sale from time to time of up to US$2 billion aggregate initial offering price
of debt securities and/or Category II Non-Cumulative Dollar Preference Shares.

Application will be made to list the Series K ADSs on the New York Stock
Exchange but no application will be made to list the Series K ADSs or the
Series K Dollar Preference Shares on the London Stock Exchange. It is expected
that the Series K Preference Shares will qualify as Tier One Capital.

The Group is being advised in connection with the issue by Salomon Smith
Barney Inc who are also acting with Lehman Brothers, Merrill Lynch & Co,
Morgan Stanley Dean Witter, Prudential Securities Incorporated and UBS Warburg
LLC as Managers.

It is intended that the net proceeds from the issue of the Series K Dollar
Preference Shares will be used to replace existing capital issues.

This announcement shall not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of the Series K Dollar Preference
Shares in any State of the United States in which such offer, solicitation or
sale would be unlawful prior to the registration or qualification under the
Securities Laws of any such State. No Series K Dollar Preference Shares will
be offered to the public in the United Kingdom.

For further information, please contact:

The Royal Bank of Scotland Group plc

Fred Watt

Group Finance Director

42 St Andrew Square

Edinburgh

EH2 2YE

Tel: [phone]



Ron Huggett

Capital Raising Director

Waterhouse Square

138-142 Holborn

London

EC1N 2TH

Tel: [phone]



Schroder Salomon Smith Barney

Alan Patterson

Managing Director

Schroder Salomon Smith Barney

Citigroup Centre

33 Canada Square

Canary Wharf

London

E14 5LB

Tel: [phone]