Royal Bank of Scotland Group Plc (RBS) history, profile and corporate video
Royal Bank of Scotland Group Plc (RBS) operates as an international banking and financial services company that provides a wide range of products and services to personal, commercial, and large corporate and institutional customers through its two principal subsidiaries: The Royal Bank of Scotland Plc and National Westminster Bank Plc as well as through a number of other well-known brands including Citizens, Charter One, Ulster Bank, Coutts, Direct Line and Churchill. Its business divisions include: UK Retail, UK Corporate, Wealth, Global Transaction Services, Ulster Bank, U.S. Retail & Commercial, Global Banking & Markets, RBS Insurance, Central Functions, Non-Core division and Business Services. The UK Retail division offers a comprehensive range of banking products and related financial services to the personal market. The UK Corporate division provides banking, finance and risk management services to the corporate and small and medium-sized enterprise sector in the United Kingdom. It offers a range of banking products and related financial services through a nationwide network of relationship managers, and also through telephone and internet channels. The Wealth division provides private banking and investment services in the United Kingdom through Coutts & Co. and Adam & Co, offshore banking through RBS International, NatWest Offshore and Isle of Man Bank, and international private banking through Coutts & Co. Ltd. The Global Transaction Services division provides cash and liquidity management, trade finance and commercial card products and services. The Ulster Bank division provides a comprehensive range of financial services. The U.S. Retail & Commercial division provides financial services primarily through the Citizens and Charter One brands. The Global Banking & Markets division provides extensive range of debt and equity financing, risk management and investment services. The RBS Insurance division provides a wide range of general insurance products to consumers through a number of well known brands including: Direct Line, Churchill and Privilege. It also provides insurance services for third party brands through its UKI Partnerships business. The Central Functions division comprises group and corporate functions, such as treasury, funding and finance, risk management, legal, communications and human resources. The Non-Core division contains a range of businesses and asset portfolios. The Business Services division supports the customer-facing businesses and provides operational technology, customer support in telephony, account management, lending and money transmission, global purchasing, property and other services. Royal Bank of Scotland Group was founded on March 25, 1968 and is headquartered in Edinburgh, the United Kingdom.“
“Royal Bank of Scotland History
The bank traces its origin to the Society of the Subscribed Equivalent Debt, which was set up by investors in the failed Company of Scotland to protect the compensation they received as part of the arrangements of the 1707 Acts of Union. The “Equivalent Society” became the “Equivalent Company” in 1724, and the new company wished to move into banking. The British government received the request favourably as the “Old Bank”, the Bank of Scotland, was suspected of having Jacobite sympathies. Accordingly, the “New Bank” was chartered in 1727 as the Royal Bank of Scotland, with Archibald Campbell, Lord Ilay, appointed its first governor.
On 31 May 1728, the Royal Bank of Scotland invents the overdraft, which is later considered an innovation in modern banking. It allows William Hogg, a merchant in the High Street of Edinburgh, access to £1,000 (£114,515 in today’s value) credit.
Competition with the Bank of Scotland
Competition between the Old and New Banks was fierce and centred on the issue of banknotes. The policy of the Royal Bank was to either drive the Bank of Scotland out of business, or take it over on favourable terms.
The Royal Bank built up large holdings of the Bank of Scotland’s notes, which it acquired in exchange for its own notes, then suddenly presented to the Bank of Scotland for payment. To pay these notes, the Bank of Scotland was forced to call in its loans and, in March 1728, to suspend payments. The suspension relieved the immediate pressure on the Bank of Scotland at the cost of substantial damage to its reputation, and gave the Royal Bank a clear space to expand its own business—although the Royal Bank’s increased note issue also made it more vulnerable to the same tactics.
Despite talk of a merger with the Bank of Scotland, the Royal Bank did not possess the wherewithal to complete the deal. By September 1728, the Bank of Scotland was able to start redeeming its notes again, with interest, and in March 1729, it resumed lending. To prevent similar attacks in the future, the Bank of Scotland put an “option clause” on its notes, giving it the right to make the notes interest-bearing while delaying payment for six months; the Royal Bank followed suit. Both banks eventually decided that the policy they had followed was mutually self-destructive and a truce was arranged, but it still took until 1751 before the two banks agreed to accept each other’s notes.
The bank opened its first branch office outside Edinburgh in 1783 when it opened one in Glasgow. Further branches were opened in Dundee, Rothesay, Dalkeith, Greenock, Port Glasgow, and Leith in the first part of the nineteenth century.
In 1821, the bank moved from its original head office in Edinburgh’s Old Town to Dundas House, on St. Andrew Square in the New Town. The building as seen along George Street forms the eastern end of the central vista in New Town. It was designed for Sir Lawrence Dundas by Sir William Chambers as a Palladian mansion, completed in 1774. An axial banking hall (Telling Room) behind the building, designed by John Dick Peddie, was added in 1857; it features a domed roof, painted blue internally, with gold star-shaped coffers. The banking hall continues in use as a branch of the bank, and Dundas House remains the registered head office of the bank to this day.
The rest of the nineteenth century saw the bank pursue mergers with other Scottish banks, chiefly as a response to failing institutions. The assets and liabilities of the Western Bank were acquired following its collapse in 1857; the Dundee Banking Company was acquired in 1864. By 1910, the Royal Bank of Scotland had 158 branches and around 900 staff.
In 1969, the bank merged with the National Commercial Bank of Scotland to become the largest clearing bank in Scotland.
Expansion into England
The expansion of the British Empire in the latter half of the nineteenth century saw the emergence of London as the largest financial centre in the world, attracting Scottish banks to expand southward into England. The first London branch of the Royal Bank of Scotland opened in 1874. However, English banks moved to prevent further expansion by Scottish banks into England; and, after a government committee was set up to examine the matter, the Scottish banks chose to drop their expansion plans. An agreement was reached, under which English banks would not open branches in Scotland and Scottish banks would not open branches in England outside London. This agreement remained in place until the 1960s, although various cross-border acquisitions were permitted.
The Royal Bank’s English expansion plans were resurrected after World War I, when it acquired various small English banks, including London-based Drummonds Bank (in 1924); Williams Deacon’s Bank, based in northwestern England (in 1930); and Glyn, Mills & Co. (in 1939); the latter two were merged in 1970 to form Williams and Glyn’s Bank, but not rebranded as the Royal Bank of Scotland until 1985.
On 20 January 2011, RBS were fined £28.58 million for anti-competitive practices that were enacted with Barclays in relation to the pricing of loan products for large professional services firms.Also in 2011, RBS prevented Basic Account holders from using the ATMs of most rival banks (although they could still use those of Natwest, Tesco, Morrisons and the Post Office).
In June 2012, computer problems prevented customers accessing accounts.
RBS released a statement on 12 June 2013 that announced a transition in which CEO Stephen Hester would stand down in December 2013 for the financial institution “to return to private ownership by the end of 2014”. For his part in the procession of the transition, Hester received 12 months’ pay and benefits worth £1.6 million, as well as the potential for £4 million in shares. The RBS stated that, as of the announcement, the search for Hester’s successor would commence.
Hester was replaced as CEO by New Zealander Ross McEwan, formerly the head of the bank’s retail arm, on 1 October 2013. McEwan, who was 56-years-old at the start of his tenure, will receive no bonus for his work in 2013 or at the end of 2014, and his pension will be replaced by an annual cash sum equivalent to 35 per cent of his salary as CEO.
In November 2013, RBS announced it was in talks to sell a shipping loan in Eagle Bulk Shipping worth $800 million. It was also announced in that month that the bank was in talks to sell its equity derivatives business to a buyer rumoured to be BNP Paribas.”
*Information from Forbes.com and Wikipedia.org
**Video published on YouTube by “Corporate Video Channel“