Trading Statement

Royal Bank of Scotland Group PLC
06 December 2006




                      THE ROYAL BANK OF SCOTLAND GROUP PLC
                            Pre-close Trading Update

6 December 2006


Introduction

The Royal Bank of Scotland Group ('RBS') will be holding discussions with
analysts and investors ahead of its close period for the year ending 31 December
2006. This statement sets out the information that will be covered in those
discussions.

Summary

RBS is performing well and our results for 2006 are expected to be slightly
ahead of market consensus forecasts*. Highlights of the Group results for 2006
are expected to include good organic growth in income, an improvement in
efficiency, strong credit metrics and stable returns.

Group

The Group is maintaining good organic growth in total income in 2006,
notwithstanding recent US dollar weakness. Non-interest income continues to grow
faster than net interest income and is expected to account for more than 60% of
total income. Net interest margin trends remain in line with previous guidance
underpinned by balanced growth in loans and deposits.

Productivity gains from our manufacturing platform allow continuing investment
for the future, whilst delivering further improvement to the cost:income ratio
for the Group.

Overall credit metrics are expected to have improved with total impairment
losses representing a slightly lower proportion of total loans and advances.

Returns on equity, and capital generation, remain strong. The Tier 1 capital
ratio is expected to be in the middle of the 7% to 8% range and we anticipate
completing our £1 billion share buyback by the year end. Strong growth in loan
origination is being complemented by the Group's increasing distribution
capabilities.

Divisions

Corporate Markets is achieving strong growth in income across its full range of
activities, while continuing to invest in people and technology. Both the
proportion of income from trading activities and our risk profile remain stable.
We have made excellent progress in building a strong and sustainable position in
Global Banking & Markets and have reinforced our leading position in UK
Corporate Banking. The corporate credit environment remains favourable.

Retail Markets is performing well, achieving good growth in income, particularly
from savings and bancassurance products. This, as well as stronger mortgage
lending in the second half, has offset weaker demand for consumer credit. Wealth
Management continues to perform strongly. Costs remain under tight control.
Growth in unsecured impairment losses continues to moderate.

Ulster Bank is delivering strong growth in income against a buoyant economic
backdrop, with strong lending and deposit volumes partially offset by tighter
margins. Credit metrics remain stable.

Citizens is growing loan and deposit volumes but the benefit is being largely
offset by lower margins caused by the continuing impact of the flattening of the
US yield curve and a change in the mix of deposits. Underlying credit metrics
remain stable, reflecting the overall quality of the portfolio. The weaker
average US dollar exchange rate will also affect second half results in sterling
terms.

RBS Insurance is maintaining a disciplined approach to pricing and is growing
income by concentrating on more profitable market segments. International motor
and commercial policies continue to grow strongly. Claims inflation continues to
impact results, however RBS Insurance is increasing its prices in line with the
market, which should be reflected in our results in due course.

Sir Fred Goodwin, Group Chief Executive, commented:

'Our 2006 results will underscore the diversity of our income and inherent
strength of our business model. We expect to deliver profitable organic growth
and improvements in key financial metrics, while continuing to invest in our
businesses and generating surplus capital. I believe these attributes will be
every bit as important in the year ahead as they have been in 2006.'



CONTACTS

Sir Fred Goodwin     Group Chief Executive               0131 523 2203
Guy Whittaker        Group Finance Director              0131 523 2028
Richard O'Connor     Head of Investor Relations          0131 626 1014

                                                         0207 672 1758

For media enquiries

Howard Moody         Group Director, Communications      0131 523 2056
Carolyn McAdam       Head of Media Relations             0131 523 2055



* Market consensus forecasts for 2006 profit before tax, purchased intangibles
amortisation and integration costs are £9,158 million, and adjusted earnings per
ordinary share of 190.7p. (Source: RBS Investor Relations, 5 December 06)



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. Information 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.



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