The Royal Bank of Scotland Group plc

30 September 2002

Citizens Financial Group Inc., a wholly owned subsidiary of The Royal Bank of Scotland Group plc, has agreed to acquire the entire issued share capital of Commonwealth Bancorp Inc of the US in a cash transaction which values it at around $450 million or $46.50 per share. This represents approximately 18 times Commonwealth Bancorp’s estimated cash earnings for 2002.

Commonwealth Bancorp is a Pennsylvania based commercial bank operating 60 branches, including 21 supermarket branches, in the greater Philadelphia area. It has $1.8 billion in assets with $1.2 billion in loans, predominately consumer loans and residential mortgages, and $1.5 billion in deposits, the quality of which has been confirmed by due diligence.

The transaction is subject to approval of US regulators and Commonwealth Bancorp shareholders and is expected to complete in the first quarter of 2003. The total consideration will be funded from existing cash resources.

Fred Goodwin, Group Chief Executive, The Royal Bank of Scotland Group, said "This is another tactical acquisition for us in the US, which is totally consistent with our strategy for growing Citizens through low risk acquisitions of retail banking franchises. The timing is good as it allows us to build on the momentum created by the completion of the integration of Mellon’s retail franchise.

The purchase of Commonwealth Bancorp further strengthens Citizens' existing geographic base and expands its presence in this important Mid-Atlantic region. It will be integrated with the Citizens' platform. Commonwealth Bancorp’s current efficiency ratio of 60% provides opportunities for meaningful revenue and cost synergies. We anticipate this acquisition will be earnings accretive for shareholders from year one."

Fred Watt
Group Finance Director
0131 523 2028

Carolyn McAdam
Head of Group Communications
0131 523 2055
07796 274968

Jonathan Atack
Head of Investor Relations
0207 427 9574
07876 145345