Royal Bank of Scotland Group Plc
|Royal Bank of Scotland|
|Key People||Stephen Hester, Chief Executive; John Hourican, Chief Executive of Global Banking and Markets|
|Products||Financial and banking services|
The Royal Bank of Scotland Group owns The Royal Bank of Scotland, a leading financial services provider and one of the oldest banks in the UK.
In addition to the UK, it has offices in Europe, the U.S. and Asia. By the end of 2002, it was the second-largest bank in Europe and the fifth largest in the world by market capitalization.
However, RBS's fortunes began to turn sour after it led the world's biggest banking takeover, paying 72 billion euros ($97.7 billion) for ABN Amro Holding N.V. (along with Fortis of Belgium and Banco Santander SA of Spain). Many criticized RBS, saying it paid too much, and Standard & Poor's cut its credit rating for the first time since 1998. RBS shares plunged 82 percent in London trading on doubts that the company, with the lowest capital reserves among its British competitors, would be able to sustain itself.
The company agreed to take part in a 50 billion-pound ($68 billion) bailout by the U.K. government in a rescue package designed to help British banks by providing up to 250 pounds of loan guarantees to help refinance debt and unlock frozen capital markets.
The Royal Bank of Scotland was founded in Edinburgh by Royal Charter in 1727 and for several decades traded solely from its head office in the city's Old Town. In 1783, RBS opened its first branch office in Glasgow and went on to develop a network of offices throughout Scotland during the 19th Century.
In 1874, it opened a branch office in London and from the 1920s, through acquisition, developed a large presence in England. Banks that joined the group during these years included Drummonds (established c.1712), Williams Deacon's Bank (established 1836), Glyn, Mills & Co (established 1753) and Child & Co (established c.1580), with business in London, north-west England and overseas.
Under the Williams & Glyn's Bank banner, it also had a growing presence in England and Wales. In 1985, Williams & Glyn's merged fully with the group's Scottish clearing bank which, thereafter, traded throughout Britain as a single entity - The Royal Bank of Scotland.
During the early 1990s, it focused on its core business of retail banking, acquiring the private bank of Adam & Company (established 1983) in 1992. In 1994 RBS launched direct banking, which quickly became Britain's fastest growing 24-hour telephone banking operation. In 1997, it announced the UK's first on-line banking service and also embarked on joint financial services ventures with Tesco and Virgin Direct.
In 2000, in the biggest takeover in the history of British banking, the Royal Bank acquired National Westminster Bank Plc to create a highly diversified portfolio of services for personal, business and corporate customers.
NatWest's retail bank continues to operate as a distinct and separate brand.
Facing the biggest loss in British history, Royal Bank of Scotland Group Plc in January of 2009 promised to make 6 billion pounds ($8.7 billion) available to U.K. borrowers as the lender took one of a handful of steps toward full government control. In exchange for government guarantees on losses from toxic debt, the bank will have to sign a binding agreement with the Treasury on how much it will lend and on what terms. Auditors will move in to check the bank is following the government directive.
On July 19, 2011, RBS was sued by federal regulators for the selling of overly risky and falsely advertised mortgage securities to Western Corporate Federal Credit Union. RBS could ultimately pay $629 million in damages following the failing of the San Dimas, Calif. credit union.
On August 5, 2011, RBS reported a hefty first-half net loss. The company cited charges for the selling of fraudulent payment-protection insurance and a markdown on Greek bonds as causes for the trouble. Chief Executive Stephen Hester was quoted as keeping a "calm and purposeful" resolve during the crisis, admitting that the economic recovery in 2011 was much slower than he expected and had thus made it difficult for RBS to move forward.
Products and Services
The Royal Bank of Scotland provides personal banking services such as mortgages, loans, investment and insurance; commercial banking for small businesses; and a full range of services in the global financial markets for international corporations and institutions.
- Philip Hampton, Chairman of the Board
- Stephen Hester, Chief Executive
- John Hourican, Chief Executive of Global Banking and Markets
- Chris Sullivan, Chief Executive, UK Corporate
- Paul Geddes, Chief Executive, RBS Insurance
- Ellen Alemany, Citizens and Head of Americas
- Nathan Bostock, Head of Restructuring and Risk
- Bruce van Saun, Group Finance Director
- Ron Teerlink, Chief Administrative Officer
- Brian Hartzer, UK Retail, Wealth and Ulster Bank
- RBS's Credibility 'Shot to Bits' Since ABN Amro Deal. Bloomberg.
- RBS May Need to Speed Up Asset Sales After U.K. Bank Bailout. Bloomberg.
- Our Banking Family. Royal Bank of Scotland Group.
- RBS Will Be Guinea Pig for ‘Creeping Nationalization’. Bloomberg.
- RBS restructuring head to quit for Lloyd - report. Yahoo Finance.
- Royal Bank of Scotland is sued by federal regulators over credit union losses. Los Angeles Times Business.
- Hefty Charges Weigh on RBS. WSJ.
- RBS suffers heavy first-half loss. Financial Times.