Professional Documents
Culture Documents
Type Public1
Founded 1727
Employees 141,0002
The Royal Bank of Scotland plc (Scottish Gaelic: Banca Rìoghail na h-Alba[1]) is one of the
retail banking subsidiaries of the Royal Bank of Scotland Group plc, and together with NatWest
and Ulster Bank, provides branch banking facilities throughout the British Isles. Royal Bank of
Scotland has around 700 branches, mainly in Scotland though there are branches in many larger
towns and cities throughout England and Wales. The Royal Bank of Scotland and its parent, the
Royal Bank of Scotland Group, are completely separate from the fellow Edinburgh based bank,
the Bank of Scotland, which pre-dates the Royal Bank of Scotland by 32 years. The Bank of
Scotland was effective in raising funds for the Jacobite Rebellion and as a result, The Royal
Bank of Scotland was established to provide a bank with strong Hanoverian and Whig ties.
Contents
[hide]
• 1 History
○ 1.1 Foundation
○ 1.2 Competition with the Bank of Scotland
○ 1.3 Scottish expansion
○ 1.4 Expansion into England
○ 1.5 Recent history
• 2 Banknotes
○ 2.1 The "Ilay" series (1987)
○ 2.2 Commemorative banknotes
• 3 Branding
• 4 References
• 5 External links
[edit] History
[edit] Foundation
Dundas House, designed by Sir William Chambers and built in 1774 for Sir Lawrence Dundas
and acquired by the bank in 1821.[2] Registered Head Office of the Royal Bank of Scotland
Group in St Andrew Square, Edinburgh.
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 as its first governor.
In 1728, the Royal Bank of Scotland became the first bank in the world to offer an overdraft
facility.
[edit] 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, and then suddenly presented them to the Bank of Scotland for
payment. To pay for 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 restarted 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.
[edit] Scottish expansion
The bank opened its first branch office outside Edinburgh in 1783 when the first Glasgow branch
opened. Further branches were opened in Dundee, Rothesay, Dalkeith, Greenock, Port Glasgow
and Leith during the early 1800s.
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 point of the New Town's central vista. It was designed for Sir Lawrence Dundas
by Sir William Chambers as a Palladian mansion, completed in 1774. An axial banking hall
(Telling Room) added behind the building, designed by John Dick Peddie, was built in 1857. It
features a domed roof, painted blue internally, with gold star-shaped coffers.[2] The banking hall
continues in use as a branch of the bank, and Dundas House remains the bank's registered head
office to this day.
The rest of the 19th century saw the bank pursue mergers with other Scottish banks, mainly in a
response to failing institutions. The assets and liabilities of the Western Bank were acquired
following its collapse in 1857 and in 1864 the Dundee Banking Co. was acquired. By 1910, the
bank 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.
[edit] Expansion into England
[edit] Banknotes
Main article: Banknotes of the pound sterling#Royal Bank of Scotland notes
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Retrieved from "http://en.wikipedia.org/wiki/Royal_Bank_of_Scotland"
Categories: Banks of the United Kingdom | Royal Bank of Scotland Group | Companies based in
Edinburgh | Banknote issuers of the United Kingdom | Early Modern Scotland | Government-
owned companies in the United Kingdom | Banks established in 1727 | William Chambers
buildings | Scottish brands
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History
Our new Helensburgh-based mobile bank not only offers the most
modern customer facilities that The Royal Bank of Scotland’s mobile
units can afford, but also boasts an unbroken pedigree of 60 years. For it was National Bank
of Scotland, a constituent company of The Royal Bank of Scotland, which introduced the
world’s very first commercial mobile banking service in November 1946.
The origins of mobile banking can be traced back to the Second World War, when field cash
offices provided all units and individual officers with the relevant currency of the country in
which they were based and received money from army post offices and officers’ shops. One
such unit, originally set up in a tent, is known to have been housed in a three-ton truck from
which army banking business was conducted. Similarly the United States army operated pay
offices from vans, one of which, a Studebaker, was purchased by National Bank of Scotland
to set up its first mobile banking service
News of the mobile bank soon reached an international audience too and National Bank of
Scotland received enquiries from banks in Africa, Europe, India, Israel, New Zealand and the
United States of America, all eager to investigate the possibilities of starting their own
services. Justifiably proud of this new Scottish export one contemporary commentator
observed that ‘...it seems only fitting that Scotland which has done so much to give banking
stability and integrity should at this later day give it mobility as well’.
The late 1960s were a time of great change in the banking industry
in Scotland. In 1969, National Commercial Bank of Scotland
amalgamated with The Royal Bank of Scotland to form The Royal
Bank of Scotland Ltd. The Royal Bank had itself begun a regular
mobile bank service (as opposed to trailers at agricultural shows) in
several areas, including the counties of Ross and Sutherland, during
the decade. Services were now no longer restricted to the Highlands and one van even
operated in the Edinburgh area. Furthermore a flying service, using the bank’s small air
carrier subsidiary, Loganair (sold in 1983), was introduced to increase banking facilities in
the Orkney Islands. This service superseded the boat bank, which sailed for the last time in
1970.
Today, nearly sixty years after the introduction of the first mobile
bank, The Royal Bank of Scotland is one of the few UK banks that
offer a mobile bank service. This service operates in the rural parts
of Scotland by taking banking facilities service to many of our
customers who do not have access to a Royal Bank branch. There
are now fourteen mobile banks in operation, based at branches in
Ayr, Bowmore, Brodick, Grantown-on-Spey, Helensburgh, Inverurie, Kyle, Lanark,
Lochboisdale, Oban, Perth, Portree, Stornoway and Ullapool. The vans continue to provide a
vital service to the communities they serve and undoubtedly live up to a prophecy made
during the 1950s: ‘What the future holds for this type of banking service ... we are unable to
say, but, undoubtedly, we are providing something which is very worthwhile and which may,
as the years go by and our presence becomes more widely known, develop, as many of the
past innovations of the Royal Bank have done, into a necessary, everyday, expected service
of the Bank’.
Visit Our Heritage for more information on the history of the Royal Bank of
Scotland
ABN AMRO
From Wikipedia, the free encyclopedia
It has been suggested that ABN AMRO Group be merged into this article or
section. (Discuss)
Founded 1991
Headquarter
Amsterdam, Netherlands
s
Asset management
Commercial banking
Products Investment banking
Private banking
Retail banking
Operating
▼ €2.6 billion (2009)[1]
income
Employees 31,000(2010)[4]
Website www.abnamro.com
ABN AMRO Bank N.V. is a Dutch bank with headquarters in Amsterdam. It was re-established
in 2009 after an upheaval that saw it acquired and broken up by a banking consortium led by
Royal Bank of Scotland Group and then, to stop it from failing, was in part nationalized by the
Dutch Government.
The bank has a long history of acquisitions and mergers that dates back to 1765. ABN AMRO
was created in 1991 as a merger between Algemene Bank Nederland (ABN) and Amsterdam and
Rotterdam Bank (AMRO). By 2007 ABN AMRO was the second largest bank in the
Netherlands and eight largest banks in Europe by assets. At that time the magazine The Banker
and Fortune Global 500 placed the bank at number 15th[5] in the list of worlds biggest banks and
it had operations in 63 countries, with over 110,000 employees.
In 2007 the bank was acquired, in what was at that time the biggest bank takeover in history, by
a consortium made up of the Royal Bank of Scotland Group, Fortis bank and Banco Santander,
of which the first two got into serious trouble as a result of the takeover. The large amount of
debt that had been created to fund the takeover had depleted the banks reserves just at the time
the Financial crisis of 2007–2010 started. As a result the Dutch government took over and
nationalized the Dutch parts of the operations which had primarily been allocated to Fortis to
stop it failing. The UK government took effective control over the divisions allocated to RBS
due to its financial bail-out of the Scottish bank. The remaining parts of ABN AMRO held by the
consortiums RFS Holdings B.V., notably the overseas businesses, were merged with RBS,
Santander, sold off or shut down.
The Dutch government appointed former Dutch finance minister Gerrit Zalm as CEO to
restructure and stabilise the bank and in February 2010 the bank was split into two separate
organizations. One owned by the Dutch government called ABN AMRO Bank N.V. and the
other owned by The Royal Bank of Scotland Group named The Royal Bank of Scotland N.V.[6]
[7]
On this date the Dutch owned businesses legally demerged from those owned by RBS.[8] The
Dutch government owned the ABN AMRO name and used it for the parts of the bank they
purchased while other companies within the Group were renamed or closed down. [9]
In 2010 ABN AMRO Group the owner of ABN AMRO Bank was created by merging the former
sections of ABN AMRO Nederland, ABN AMRO Private Banking, together with Fortis Bank
Nederland as well as formerly Fortis owned private bank MeesPierson and International
Diamond and Jewelry Group. This started operating under the name ABN AMRO on 1 July
2010 at which time Fortis bank name officially ended. The Dutch government has said it would
remain state owned at least until 2011 after which it would consider a public stock market listing
for the new bank.
Contents
[hide]
• 1 History
○ 1.1 Early years
○ 1.2 Reaching a cross roads
○ 1.3 Acquisition battle
○ 1.4 Acquisition and break up
○ 1.5 Impact of the 2008 Financial crisis
1.5.1 RBS
1.5.2 Fortis
1.5.3 Disposals and renaming
1.5.4 Dutch government ownership
○ 1.6 Goldman Sachs SEC Lawsuit
• 2 Bank Operations
• 3 Financial data
• 4 Alumni
• 5 Trivia
○ 5.1 Name Usage and spelling
○ 5.2 Logo and Style
• 6 See also
• 7 References
• 8 External links
[edit] History
[edit] Early years
In 1824 King William I established the Nederlandsche Handel-Maatschappij (NHM) a trading
company to revive trade and financing of the Dutch East Indies and it would become one of the
primary ancestors of ABN AMRO. The NHM merged with the Twentsche Bank in 1964 to form
Algemene Bank Nederland (ABN). In the same year the Amsterdamsche Bank which was
established in 1871 merged with the Rotterdamsche Bank which was established in 1873 (as part
of merger that included Determeijer Weslingh & Zn. from 1765) to form AMRO Bank. In 1991
ABN and AMRO Bank agreed to merge to create ABN AMRO.
Through these mergers and acquisitions, ABN AMRO gained a large number of overseas
companies and branches. From the NHM organisation it had a significant branch network in Asia
and the middle east. One of these the Saudi Hollandi Bank which was the old NHM Jeddah
branch and in which ABN AMRO still had a 40% stake, caused questions in the dutch
parliament from the political Party for Freedom. Another the Hollandsche Bank-Unie (HBU),
which was created from the merger of the Hollandsche Bank voor de Middellandsche Zee
(HBMZ) and the Hollandsche Zuid-Amerika Bank in 1933, gave ABN AMRO an extensive
network of branches in South and Central America. In 1979 ABN expanded into North America
with the acquisition of Chicago based LaSalle National Bank.
After the merger of ABN and AMRO Bank in 1991, ABN AMRO continued to grow through a
number of further acquisitions, including in 1996 the purchase of suburban Detroit based
Standard Federal Bank and in 2001 the Michigan National Bank both of which we rebranded as
LaSalle National bank.
ABN Amro purchased The Chicago Corporation, an American securities and commodities
trading and clearing corporation in fall 1995. [10]
Other major acquisitions included the Brazilian bank Banco Real in 1998 and the Italian bank
Antonveneta in 2006. It was also involved in the controversial acquisition of the Dutch local
government mortgage and building development organisation, the Bouwfonds [11] in 2000. ABN
AMRO sold the Bouwfonds as a going concern in 2006.
[edit] Reaching a cross roads
ABN AMRO had come to a crossroads in the beginning of 2005. The bank had still not come
close to its own target of having an ROE that would put it among the top 5 of its peer group, a
target that the CEO, Rijkman Groenink had set upon his appointment in 2000. From 2000 until
2005, ABN AMRO's stock price stagnated.
Financial results in 2006 added to concerns about the bank's future. Operating expenses
increased at a greater rate than operating revenue, and the efficiency ratio deteriorated further to
69.9%. Non-performing loans increased considerably year on year by 192%. Net profits were
only boosted by sustained asset sales.
There had been some calls, over the prior couple of years, for ABN AMRO to break up, to
merge, or to be acquired. On February 21, 2007, the call came from the TCI hedge fund which
asked the Chairman of the Supervisory Board to actively investigate a merger, acquisition or
breakup of ABN AMRO, stating that the current stock price didn't reflect the true value of the
underlying assets. TCI asked the chairman to put their request on the agenda of the annual
shareholders' meeting of April 2007.
Events accelerated when on March 20 the British bank Barclays and ABN AMRO both
confirmed they were in exclusive talks about a possible merger.
[edit] Acquisition battle
On March 28, ABN AMRO published the agenda for the shareholders' meeting of 2007. It
included all items requested by TCI, but with the recommendation not to follow the request for a
breakup of the company.[12]
ABN AMRO Insurance headquarters in Zwolle.
However, on April 18, another British bank, the Royal Bank of Scotland (RBS) contacted ABN
AMRO to propose a deal in which a consortium of banks, including RBS, Belgium's Fortis, and
Spain's Banco Santander Central Hispano (now Banco Santander) would jointly bid for ABN
AMRO and thereafter break up the different divisions of the company between them. According
to the proposed deal, RBS would take over ABN's Chicago operations, LaSalle, and ABN's
wholesale operations; while Banco Santander would take the Brazilian operations and Fortis, the
Dutch operations.
On April 23 ABN AMRO and Barclays announced the proposed acquisition of ABN AMRO by
Barclays. The deal was valued at €67 billion. Part of the deal was the sale of LaSalle Bank to
Bank of America for €21 billion.[13]
Two days later the RBS-led consortium brought out their indicative offer, worth €72 billion, if
ABN AMRO would abandon its sale of LaSalle Bank to Bank of America. During the
shareholders' meeting the next day, a majority of about 68% of the shareholders voted in favour
of the breakup as requested by TCI.[14]
The sale of LaSalle was seen as obstructive by many: as a way of blocking the RBS bid, which
hinged on further access to the US markets, in order to expand on the success of the group's
existing American brands, Citizens Bank and Charter One. On May 3, 2007, the Dutch Investors'
Association (Vereniging van Effectenbezitters), with the support of shareholders representing up
to 20 percent of ABN's shares, took its case to the Dutch commercial court in Amsterdam, asking
for an injunction against the LaSalle sale. The court ruled that the sale of LaSalle could not be
viewed apart from the current merger talks of Barclays with ABN AMRO, and that the ABN
AMRO shareholders should be able to approve other possible merger/acquisition candidates in a
general shareholder meeting. However in July 2007, the Dutch Supreme Court ruled that Bank of
America's acquisition of LaSalle Bank Corporation could proceed. Bank of America absorbed
LaSalle effective October 1, 2007.
ABN AMRO in Sydney.
On July 23 Barclays raised its offer for ABN AMRO to €67.5bn, after securing investments from
the governments of China and Singapore, but it was still short of the RBS consortium's offer.
Barclay's revised bid was worth €35.73 a share — 4.3% more than its previous offer. The offer,
which included 37% cash, remained below the €38.40-a-share offer made the week before by the
RFS consortium. Their revised offer didn't include an offer for La Salle bank, since ABN AMRO
could proceed with the sale of that subsidiary to Bank of America. RBS would now settle for
ABN's investment-banking division and its Asian Network.
[edit] Acquisition and break up
On July 30 ABN AMRO withdrew its support for Barclays’ offer which was lower than the offer
from the group led by RBS. While the Barclays offer matched ABN AMRO’s “strategic vision,”
the board couldn’t recommend it from “a financial point of view.” The US$98.3bn bid from
RBS, Fortis and Banco Santander was 9.8% higher than Barclays’ offer.
Barclays Bank withdrew its bid for ABN AMRO on 5 October, clearing the way for the RBS-led
consortium's bid to go through, along with its planned dismemberment of ABN AMRO. Fortis
would get ABN AMRO's Dutch and Belgian operations, Banco Santander would get Banco Real
in Brazil, and Banca Antonveneta in Italy and RBS would get ABN AMRO's wholesale division
and all other operations, including those in Asia.
On October 9, the RFS consortium led by Royal Bank of Scotland, bidding for control of ABN
AMRO, formally declared victory after shareholders, representing 86 percent of the Dutch
bank’s shares, accepted the RFS group’s €70bn offer. This level of acceptance cleared the way
for the consortium to take formal control. The group declared its offer unconditional on October
10, when Fortis completed its €13bn rights issue. Thus the financing required for the group’s
€38-a-share offer, which included €35.60 in cash, was realised. Rijkman Groenink, Chairman of
the Managing Board of ABN AMRO, who heavily backed the Barclays offer, decided that he
would step down.[15]
[edit] Impact of the 2008 Financial crisis
[edit] RBS
Further information: Royal Bank of Scotland Group#2008-2009 financial crisis
On 22 April 2008 RBS announced the largest rights issue in British corporate history, which
aimed to raise £12billion in new capital to offset a writedown of £5.9billion resulting from the
bad investments and to shore up its reserves following the purchase of ABN AMRO.
On 13 October 2008, British Prime Minister Gordon Brown announced a UK government bailout
of the financial system. The Treasury would infuse £37 billion ($64 billion, €47 billion) of new
capital into Royal Bank of Scotland Group Plc, Lloyds TSB and HBOS Plc, to avert financial
sector collapse. This resulted in a total government ownership in RBS of 58%.
As a consequence of this rescue the chief executive of the group Sir Fred Goodwin offered his
resignation, which was duly accepted.
In January 2009 it was announced that RBS had made a loss of £28bn of which £20bn was due
to ABN AMRO.[16] At the same time the government converted their preference shares to
ordinary shares resulting in a 70% ownership of RBS.[17]
[edit] Fortis
Further information: Fortis (finance)#ABN AMRO and its aftermath
ABN AMRO headquarters in Amsterdam.
On July 11, 2008, the CEO of Fortis, Jean Votron, stepped down after the ABN AMRO deal had
depleted Fortis' capital.[18][19][20] The total worth of Fortis, as reflected by its stock value, was at
that time a third of what it had been before the acquisition, and just under the value it had paid
merely for the Benelux activities of ABN AMRO.[21]
Fortis announced in September 2008 that it intended to sell its stake in RFS Holdings, which
includes all activities that have not been transferred yet to Fortis (i.e. everything except Asset
Management).[22][23]
[edit] Disposals and renaming
In 2008, RFS Holdings completed the sale of a portfolio of private equity interests in 32
European companies managed by AAC Capital Partners to a consortium comprising Goldman
Sachs, AlpInvest Partners and CPP for $1.5 billion through a private equity secondary market
transaction.[24][25]
In September 2009, RBS rebranded the Morgans sharedealing business in Australia as RBS
Morgans in September 2009.[26] This followed the rebranding of the ABN AMRO Australia unit
to RBS Australia in March that year.[27]
On 10 February 2010, RBS announced that branches of the businesses it owned in India [28] and
the United Arab Emirates were to be rebranded under its name.[29]. HSBC Holdings said it would
buy the Indian retail and commercial banking businesses of Royal Bank of Scotland for $1.8b.[30]
[31]
ABN Amro was mentioned by the SEC in court fillings when it sued Goldman Sachs and one of
Goldman's CDO traders on April 16, 2010. The SEC alleges that ABN Amro was on the wrong
side of the CDO instruments Goldman was creating and that Goldman defrauded both IKB (a
german bank) and ABN-Amro in failing to disclose that the CDO's ABN Amro was purchasing
were not assembled by a third party, but instead through the guidance of a hedge fund that was
counterparty in the CDS transaction. This hedge fund, Paulson & Co., stood to reap great
financial benefit in the event of default.[34]
[edit] Bank Operations
ABN AMRO Bank has offices in 15 countries, but all but 5,000 of its 32,000 employees are in
the Netherlands. Businesses include a private bank focusing on high-net-worth clients in 14
countries and a commercial and merchant banking operation, which is a player in specialist
markets such as energy, commodities and transportation as well as brokerage, Clearing &
Custody.[35]
[edit] Financial data
Financial Data
Source: OpesC'
[edit] Alumni
Former employees of ABN AMRO:
• Vladimer Gurgenidze, Former Prime Minister of Georgia, former employee of
ABN AMRO
[edit] Trivia
[edit] Name Usage and spelling
The bank refers to itself as ABN AMRO in all capitals, based on an acronym of the two
originating banks names Algemene Bank Nederland and the Amsterdam and Rotterdam Bank, in
the second case the first two letters of each town make up the AMRO. However, it is pronounced
so that each letter of 'ABN' is said separately and 'Amro' is said as a word and this is the reason a
number some news media spell the name as 'ABN Amro'. In written text about the bank both
versions have been used although the bank itself uses only the uppercase version. In spoken texts
the bank is often referred to as just ABN bank.
[edit] Logo and Style
The green and yellow shield logo was designed by the design house Landor Associates for ABN
AMRO in 1991 and has been used as a brand for the bank and all its subsidiaries.
[edit] See also
Companies
portal
• History of banking
• Primary dealers
• European Financial Services Roundtable