Sale of Gartmore to Nationwide

30 March 2000

The Royal Bank of Scotland Group plc ("RBS") announces that its subsidiary, National Westminster Bank Plc ("NatWest") has agreed to sell Gartmore Investment Management Plc ("Gartmore"), its fund management business, to Nationwide Mutual Insurance Company, a diversified insurance and financial services group based in Columbus, Ohio in the USA ("Nationwide"). The deal values the business at approximately £1,030 million. The agreement is subject to regulatory approval which is expected to be completed by 30 June 2000. The total consideration to be received by RBS will be satisfied in cash on completion. The transaction is not expected to have a material impact on RBS.

Gartmore is an international fund management business based in London with offices in Scotland, Jersey, Germany, Japan and the USA and was merged with NatWest’s existing fund management operation on acquisition by NatWest in 1996. It is anticipated the combined Gartmore Group will retain a significant presence in London, utilising existing Gartmore systems and management.

Announcing the sale of Gartmore to Nationwide, Fred Goodwin, Group Chief Executive of RBS, said:

"RBS recognised in its bid for NatWest that it was not the best owner of Gartmore. This announcement is, therefore, a natural next step for Gartmore which will become part of a diversified international financial services company providing an excellent European base for Nationwide. The complimentary nature of Gartmore and Nationwide’s businesses will provide substantial strength going forward and a long-term platform for growth and expansion. This deal is good news for Gartmore employees and clients".

Commenting on the change of ownership, Paul Myners, Executive Chairman of Gartmore, said:

"This is a very positive outcome for Gartmore’s clients and staff. Our business is going from strength to strength and the only factor holding us back has been the recent uncertainty over our ownership. Nationwide is a highly rated, financially strong parent with the resources and commitment to build a global asset management business. We are delighted that Gartmore has been chosen as the engine of this future growth. Nationwide is an ideal new owner for our business."

Commenting on the acquisition, Dimon R. McFerson, Nationwide’s Chairman and Chief Executive Officer said:

"One of Nationwide’s major goals is to build a global asset management business. The acquisition of Gartmore gives us immediate scale and global brand name credibility, backed by excellent management and strong investment performance. We believe this move has the potential to create substantial growth opportunities within the Nationwide family of companies. We fully support Gartmore’s management team and its operations and will make no changes as a consequence of the acquisition".