Trading Statement

Royal Bank of Scotland Group PLC
13 June 2006

THE ROYAL BANK OF SCOTLAND GROUP PLC

Pre-close Trading Update


13 June 2006








Introduction


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 2006. This statement sets out the information that will be covered in those
discussions.


Summary


RBS has performed well in the first half of 2006 and our interim results, which
will be released on 4 August, are anticipated to be in line with expectations.
Highlights of our interim results for 2006 are expected to include good organic
growth in income, disciplined expense control and a small improvement in overall
credit metrics.


Income and Margins


Income: The Group has continued to achieve good growth in income, with strong
performances in Corporate Markets, particularly Global Banking & Markets, and
Ulster Bank. Retail Markets' income growth reflects the continuing transition in
UK customer behaviour away from unsecured lending towards savings and investment
products, with Wealth Management performing particularly well. RBS Insurance has
continued to increase its income in competitive conditions. Citizens has
achieved good growth in its business activities but the increase in its income
in US dollars has been constrained by the continuing impact of the flatter yield
curve. Group non-interest income is in line to account for over 60% of total
income.


Margins: The Group's net interest margin is expected to be lower, in line with
guidance given at our results presentation in February, mainly as a result of
changes in the product mix and the continuing impact of the flatter yield curve
in the US. The risk-adjusted return on the Group's portfolio remains attractive.




Expenses


The Group has maintained its disciplined approach to expense management. While
making investments to support future growth, the Group continues to benefit from
its scalable operating platform and the resulting productivity gains.


Credit


Overall credit metrics are expected to show a small improvement, with growth in
impairment losses lower than growth in loans and advances. Impairment losses in
Retail Markets are in line with the volume growth in personal unsecured lending
over the past two to three years and the seasoning of these portfolios.
Corporate credit conditions remain benign.


Capital


During the first half of 2006 the Group has paid the final dividend for 2005 of
£1.7 billion and has commenced its £1 billion share buy-back programme. Strong
growth in loan origination has been complemented by the Group's increasing
distribution capabilities and it is anticipated that the Group's Tier 1 capital
ratio at the end of June will be around the middle of the 7% to 8% range, as
indicated at the time of our results in February.


Sir Fred Goodwin, Group Chief Executive, commented:


'Organic growth has been a key element of the Group's strategy and a prominent
theme in our results over recent years. 2006 is progressing well, and we are
confident that our interim results will clearly demonstrate the inherent
strength of our business model, the benefits of our diversified business
activities, and the range of options available to us for future organic growth.'


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




Unless otherwise stated, comments on trends contained in this statement refer to
the results for the half year ending 30 June 2006 compared with the equivalent
period in 2005.


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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