Pre-close Trading Up-date

Royal Bank of Scotland Group PLC
09 June 2004

The Royal Bank of Scotland Group plc

Pre-close Trading Up-date


9 June 2004

The Royal Bank of Scotland Group (RBS) will be holding discussions with analysts
and investors ahead of its close period for the half year ending 30 June 2004.
This statement sets out the information that will be covered in those
discussions.

Summary

RBS has continued to make good progress in the first half of 2004. Key features
of its interim results, which will be released on Tuesday 3 August 2004, are
expected to include strong income growth, a further improvement in efficiency
and stable credit metrics. Consequently, profits are anticipated to be in line
with expectations.

Income and Margins

RBS has maintained strong momentum in its income growth in the first half of
2004. All divisions have achieved good organic growth in local currencies,
although Citizens' results in sterling have been impacted by the strength of
sterling against the US dollar.

RBS has continued to achieve good growth in assets, particularly small and
mid-corporate lending and retail assets. Large corporate lending has remained
relatively subdued. The Group has also continued to achieve good growth in
deposits.

As previously indicated, the Group net interest margin is expected to be a few
basis points lower than last year due to the inclusion of First Active, and the
business mix impact of particularly strong growth in mortgages and rental
assets. Excluding this, margins have remained stable.

Non-interest income has continued to reflect strong growth across general
insurance, credit cards and money transmission income. We continue to see good
underlying momentum in the customer-facing activities that generate dealing
profits.

Expenses

The Group remains focused on improving its efficiency. Expenses have increased
to support higher business volumes, and the Group continues to invest in
initiatives that will improve its efficiency further in the future. The rate of
income growth is expected to exceed the growth in expenses, leading to a further
improvement in the Group cost:income ratio.

Credit Quality and Provisions

Credit quality remains strong. The credit environment is positive overall,
continuing to improve in corporate lending and remaining stable in small
business lending and the personal sector.

As predicted at the 2003 results presentation, the growth of the personal loan
portfolio over recent years has contributed to an increase in consumer lending
provisions, although the Group charge for bad debts as a percentage of book is
expected to continue the improving trend reported in 2003.

Acquisitions

The integration of each of the acquisitions announced in 2003 is fully on track,
with good underlying performance of the acquired businesses.

On 3 February 2004, RBS announced the acquisition of the credit card business of
People's Bank of Connecticut; this acquisition was completed on 5 March 2004.

On 4 May 2004, RBS announced the acquisition of Charter One Financial Inc for
approximately $10.5 billion. This transaction is subject to the approval of
Charter One shareholders and the relevant regulatory authorities, and is
expected to be completed in the fourth quarter of 2004.

Capital

Capital ratios remain strong, and are currently at levels above our target
ranges, given the funding that has taken place in connection with the
acquisition of Charter One. Allowing for completion of the acquisition of
Charter One, RBS's tier 1 ratio is expected to be close to 7% at the end of
2004.

Fred Goodwin, Group Chief Executive, commented:

'Good momentum continues across each of our businesses and we are on track to
deliver strong organic growth in income whilst continuing to improve
efficiency.'

CONTACTS


Fred Goodwin                   Group Chief Executive             0131 523 2003

Fred Watt                      Group Finance Director            0131 523 2028

Richard O'Connor               Head of Investor Relations        0131 523 5103
                                                                 020 7672 1758

For media enquiries:

Howard Moody                   Group Director, Communications    0131 523 2056
                                                                 07768 033562



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 RBS'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. These factors risks and uncertainties are discussed in
RBS's SEC filings, including, but not limited to, RBS's report on Form 6-K
containing this announcement and certain sections of RBS's Annual Report on Form
20-F. In formation in this announcement of the price at which investments have
been bought or sold in the past or the yield on investments cannot be relied
upon as a guide to future performance. RBS assumes no responsibility to update
any of the forward looking statements contained in this announcement.




                      This information is provided by RNS
            The company news service from the London Stock Exchange