Citizens reports strong earnings

Results reflect organic loan and deposit growth

Providence, R.I. (March 1, 2007) - Citizens Financial Group, Inc. (“Citizens”) today announced earnings of $2.92 billion for the year 2006, an increase of 2% over 2005. This reflects average loan growth of 10% and average deposit growth of 4%.

“This was our 14th consecutive year of profit growth,” said Lawrence K. Fish, Chairman and CEO of Citizens Financial Group, Inc. “We are particularly pleased with our performance and growth in our lending and deposit businesses despite continued interest rate margin pressure that is impacting the entire banking industry.”

“We have also continued to expand our branch footprint. We extended our supermarket banking franchise into New York through our partnership with Stop & Shop Supermarkets, while in October we announced the purchase of GreatBanc, Inc., strengthening our position in Chicago and making us the fourth-largest bank in that market,” Fish said.

Citizens’ earnings are based on International Financial Reporting Standards and are as reported by its parent company, The Royal Bank of Scotland Group plc (“RBS”), and reflect pre-tax operating profit defined as earnings before taxation, amortization of intangibles, and acquisition costs.

Average loans and advances to customers grew strongly, increasing by 10%. Average corporate lending rose by 15% (excluding finance leases) reflecting Citizens’ success in adding new mid-corporate customers and increasing its total number of business customers by 4% to 467,000. In personal lending, Citizens increased average mortgage and home equity lending by 14%, though the mortgage market slowed in the second half. Average credit card loans, while still relatively small, increased by 19%.

Average customer deposits increased by 4%, although spot balances at the end of 2006 were little changed from the end of 2005. As interest rates rose further and the U.S. yield curve inverted, low-cost checking and liquid savings deposits migrated to higher-cost deposit products. This migration was a principal reason for the decline in Citizens’ net interest margin to 2.72% in 2006, compared with 3.00% in 2005. The decline slowed over the course of the year, as the net interest margin in the second half was six basis points lower than in the first. Lower net interest margins more than offset the benefit of higher average loans and deposits, leaving net interest income marginally lower at $3.84 billion.

Non-interest income rose by 9% to $2.27 billion. Business and corporate non-interest income rose strongly, with good results especially in foreign exchange, interest rate derivatives and cash management benefiting from increased activity with RBS Corporate Markets. There was good progress in debit cards, where issuance has been boosted by the launch in September of the “Everyday Rewards” program. Citizens has also become the United States’ leading issuer of

Paypass^TM  contactless debit cards, with 3.65 million cards issued. Credit card customers increased by 20% while RBS Lynk, Citizens’ merchant acquiring business, also achieved significant growth, processing 40% more transactions than it did in 2005 and expanding its merchant base by 11%.

Effective cost control limited the increase in total expenses to 1%, while investing in growth opportunities such as mid-corporate banking, contactless debit cards, merchant acquiring and supermarket banking.
   
Provision for losses totaled $333 million, representing just 0.31% of loans and advances to customers and illustrating the prime quality of Citizens’ portfolio. Underlying strong credit quality remained unchanged as Citizens’ portfolio grew. Citizens’ consumer lending is to prime customers with average FICO scores on our portfolios, including home equity lines of credit, in excess of 700, and 95% of lending is secured.

About Citizens Financial Group, Inc.

Citizens Financial Group, Inc. is a commercial bank holding company headquartered in Providence, R.I. It has more than 1,600 branches, approximately 3,100 ATMs and approximately 25,000 employees. It operates its 13-state branch network in Connecticut, Delaware, Illinois, Indiana, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, and Vermont, and has a retail and commercial presence in over 40 states. Citizens is the eighth-largest commercial banking company in the United States ranked by deposits as of September 30, 2006. Citizens is owned by RBS.

CITIZENS FINANCIAL GROUP, INC.

Note:
Citizens' results are as reported by its parent company, The Royal Bank of Scotland Group plc, and are based on International Financial Reporting Standards. The results include the asset finance business of The Royal Bank of Scotland plc, New York Branch.