RBS Response to Moody's action

RNS Number : 7673P

Royal Bank of Scotland Group PLC

07 October 2011

 



The Royal Bank of Scotland Group plc
07 October 2011

RBS Response to Moody's action

The Royal Bank of Scotland Group plc ("RBS"/"the Group") notes the decision by Moody's Investor Service ("Moody's") to downgrade the credit rating of 12 UK banks due to the withdrawal of implied Government support from the banking sector. While RBS is among the banks to be downgraded Moody's has affirmed the Group's standalone rating and confirmed that the action does not reflect any deterioration in the financial strength of the UK banking system.

RBS has made significant progress in strengthening its credit profile since 2008. As at June 30 2011, we have improved the Group's loan to deposit ratio from 154% to 114%, liquidity reserves of £155 bn exceeded short-term wholesale funding of £148 bn, Non-Core assets reduced by 57% from £258 bn to £113 bn and the Core Tier 1 capital ratio was a robust 11.1%. This progress has been recognised by both Standard & Poor's and Fitch Rating Services, who have both upgraded RBS's standalone rating by two notches in the past 18 months.

We are disappointed that Moody's have not acknowledged the progress we have made in strengthening the bank's credit profile. We do, however, see the removal of implicit Government support for the UK banking sector as being a necessary and important step forward as the sector returns to standalone strength.

RBS has already completed its wholesale funding requirements for 2011 and continues to make excellent progress in strengthening key balance sheet measures in the second half to date.

Notes:

·      The Royal Bank of Scotland plc has been downgraded from Aa3 to A2

·      The Royal Bank of Scotland Group plc has been downgraded from A1 to A3

For further information contact:

·      RBS Group Media Relations
Michael Strachan, Group Media Centre
[phone]

·      RBS Group Investor Relations
Emete Hassan, Head of Debt Investor Relations
[phone]

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