Executive Summary
RBS (LON:RBS) is a UK-based financial services provider that operates on a global scale. The company has a long history of banking in the UK, having been founded in 1727, although more recently it hasencountered difficult times due to the global economic crisis and to an admittedly mistaken strategic direction. Following an attempt to raise capital from shareholders, the bank accepted funding £20bn from the UK government, giving the latter a 58% and then 83% share in the business. [1] RBS provides a broad range of financial products to both business and personal customers, and it owns a number of recognised brands including NatWest, Direct Line, Churchill and Ulster Bank.
Company History
Key milestones in the bank's history are provided below.
- 1727: RBS is founded in Edinburgh;
- 1900s onwards: the bank expands rapidly through the aquisition of several English banks;
- 1969: RBS merges with the National Commercial Bank of Scotland;
- 1970s: embracing computerisation, the bank launches a new generation of cash machines;
- 1980s: Direct Line motor insurance is launched;
- 2000: RBS acquires NatWest;
- 2005: the company forms a strategic partnership with Bank of China.
- 2008: RBS partially nationalised following cash injection from Government in wake of credit crunch.
Current Events
- 2007: RBS leads a consortium to acquire Dutch bank ABN AMRO;
- 2008: the company receives £20bn in funding from the UK government;
The recent turnaround in the bank's fortunes, from reporting record profits in 2007, to making a loss of over £6,000m in 2008 [2] are blamed on its aggressive and sometimes reckless acquisition activity, led by Sir Fred Goodwin. [3] .
Sir Fred has since left the company, amid much public anger of the £16m pension he is to receive. [4]
Business Model
RBS serves more than three million customers from a 650-strong branch network throughout Great Britain. In addition, it operates in more than 50 countries around the world to provide a range of retail and corporate banking, consumer finance, insurance and wealth management services. Coutts & Co provides integrated wealth management services to high net worth individuals across the UK.
RBS is now one of the top 10 banking groups in the US, and an established name across North America. Citizens Bank has retail branches in 13 states, while RBS Global Banking & Markets works with 80 per cent of the Fortune 100…
