Chairman's AGM Statement

Royal Bank of Scotland Group PLC
13 January 2000


CHAIRMAN'S REMARKS AT ROYAL BANK OF SCOTLAND GROUP AGM

Excellent  progress  was  made  by  all The Royal  Bank  of  Scotland  Group's
businesses  in  1999, which was yet another record year  for  the  Group,  the
Chairman,  Viscount Younger of Leckie, told shareholders today.   Speaking  at
the  annual  general meeting in Edinburgh, Viscount Younger  said:   'We  have
again  increased our profits and improved our efficiency.  Overall,  our  1999
results  clearly  demonstrate the strength, diversity and flexibility  of  our
Group.

'A  year  ago, I was able to report to you an outstanding improvement of  over
30  per cent in our 1998 profit before tax, to over £1 billion.  At that time,
there  was  concern  about  a number of international  economies  and  it  was
difficult to be confident that we could achieve further substantial growth  in
our profit in 1999.  However, I am delighted to report that we did achieve  in
1999  a  further  increase  of  21 per cent  in  our  profit  before  tax,  to
£1,211 million.

'Our  earnings  per share also increased, by 20 per cent, from 73.4  pence  to
87.8  pence, and we have recommended a final dividend of 20.3 pence per share,
to  give a total for the year of 28.5 pence per share - an increase of 16  per
cent  over last year.  The proposed dividend is covered more than three  times
by our earnings.

'In the largest part of our business, the UK Bank, we increased our profit  by
a  further  18  per cent, from £626 million to £736 million, as  a  result  of
excellent performances in both Retail and Corporate banking.

  'Of  all our achievements in recent years, the growth in our UK Bank is  the
one  which  gives me greatest satisfaction.  It is one thing to set up  Direct
Line,  or  a  new  internet  company, it is a  much  more  difficult  task  to
re-invigorate an apparently mature core banking business.  But that is what we
have done: over the last four years, our UK Bank profit has more than doubled,
from £355 million to £736 million.

'And,  for  this, I would, on your behalf, like to thank Sir George Mathewson,
whose  vision  and  leadership  enabled us to  transform  our  retail  banking
activities,  through  Project  Columbus,  and  to  enhance  substantially  our
corporate  banking and treasury activities.  I would also like to pay  tribute
to  Iain Robertson and his team who have done such an excellent job in growing
our UK Bank so successfully.

'In  addition  to  growing its existing activities,  the  UK  Bank  made  good
progress in offering its products and services on the internet.  You may  have
seen  that  our efforts were recognised in a recent independent  review  which
rated the Royal Bank more highly than any other UK bank. The review rated  all
UK  high  street  banks'  on-line services on a  range  of  factors  including
content,  ease of use, speed and design, and I would like to quote the  author
of the review, who said that 'Clearly, RBS has made a purposeful commitment to
the  internet,  and  is  punching well above  its  weight  in  British  online
financial services.'

Lord  Younger  also  outlined  to shareholders a  number  of  internet-related
initiatives under way across the Group's businesses.

He  said :'Tesco is the world's biggest online grocer on the internet, and our
joint  venture, Tesco Personal Finance has an integrated position within  this
site.  Tesco Personal Finance has offered Online Banking through the  internet
since  November 1999 and plans to sell savings, loans and credit cards  online
by  May  2000.  Additionally, online quotes for home, motor, travel,  and  pet
insurance will be available on the internet within the next six months.

  'At  Virgin  Direct  Personal Finance, the internet was  developed  into  an
important delivery channel for the Virgin One account over the course  of  the
last  year, with around 15 per cent of new business being instigated over  the
internet.  Full internet banking will be available from February 2000 onwards.
It   is  expected  that  the  majority  of  customers  will  have  an  on-line
relationship with Virgin One by the end of this year.

'During  the  year,  Direct Line improved its service  on  the  internet.   In
September  1999,  it  introduced  an  online  application  process  for  motor
insurance,  home  insurance,  and  motor rescue.  This  enables  customers  to
complete  a  transaction within just a few minutes. This service is  available
24  hours  a day, every day of the year. This new site already attracted  more
than half a million visitors in its first three months.

'In the United States, Citizens, in addition to its presence on the World Wide
Web,   launched  its internet banking service in July 1999.   Customers  using
this  service  can,  amongst other options, view their  account  balances  and
transfer  funds online. Furthermore, internet users can open equity loans  and
lines of credit on this website.

'In  Offshore  Banking,  The Royal Bank of Scotland  International,  which  is
headquartered in Jersey, launched an e-banking service in October 1999 for its
financial intermediary customers - the world's first service of its kind.  One
of  the characteristics of this business-to-business internet application  for
the  offshore  finance  industry  is  the  provision  of  24  hour  real  time
information.'

Viscount  Younger  said that in all parts of the Group,  record  results  were
achieved  in  1999.   He  said: 'These results would not  have  been  possible
without the hard work and dedication of our staff and, on your behalf, I would
like to thank them all for their contribution to our success.

  'We particularly value the work of all our staff highly and put considerable
effort  into  informing  them of progress, changes  and  developments  in  our
various  businesses.   Through  the internal RBTV  service,  we  are  able  to
communicate directly with a large proportion of our staff.

 'Each year we ask an external company, International Survey Research, to
carry out an opinion survey of our staff, and we share the results of this
with our staff. I am delighted to report that the result of this year's survey
of our staff was among the best that we have ever had.  The Royal Bank came
out of this survey as substantially the best of the UK Banks under a number of
headings.
                                       
'In  an  eventful  year, we have played our part in the  community,  not  only
through  our  sponsorship of a wide range of sports and artistic  events,  but
also  through  a  variety  of initiatives, focussed on  encouraging  financial
capability  across  society,  particularly  among  young  people.    I   would
specifically like to mention Fred Goodwin's role as Chairman of the Government
Task  Force  on Credit Unions, which made a series of recommendations  on  how
credit unions could be supported to extend access to financial services.

'In  concluding,  I would like to reiterate our confidence that  whatever  the
future  holds,  the  Royal Bank Group will continue to grow  and  prosper  its
businesses in the years ahead.

'We  have  achieved strong growth in our Group earnings, reflecting  not  only
success  in growing our income through new initiatives, but also in  our  main
businesses of the UK Bank, Direct Line and Citizens.

'The  quality  of  our  earnings is also supported by  the  diversity  of  our
businesses,  and  we  continue  to  benefit  from  the  flexibility   of   our
organisation.  We have a broad range of different businesses and  the  quality
of  management  to enable us to run these in an innovative and entrepreneurial
manner.  In this way, we can respond quickly to changing circumstances and new
opportunities,  giving  us greater options for the future  than  many  of  our
competitors.

'I  believe  that  you,  our  shareholders, can be justifiably  proud  of  the
achievements of your Company.'