FILED PURSUANT TO RULE 424 (b)2
REGISTRATION NO. 333-73950
Prospectus Supplement to Prospectus dated November 23, 2001
[GRAPHIC OMITTED] The Royal Bank of Scotland Group plc
$250,000,000
5% Subordinated Notes due 2014
Interest payable April 1 and October 1
Issue Price: 98.072%
The Subordinated Notes will bear interest from October 2, 2002 at a rate of 5%
per year, payable on April 1 and October 1 of each year, beginning April 1,
2003. The Subordinated Notes will mature on October 1, 2014. On October 2,
2002, we issued $750,000,000 aggregate principal amount of 5% Subordinated
Notes due 2014. The Subordinated Notes offered hereby are identical to, and
are a further issuance of, that series of notes. Upon issuance, the
Subordinated Notes offered hereby will be fungible with the series of notes
issued on October 2, 2002.
The Subordinated Notes are subordinated in right of payment to all of our
senior debt from time to time outstanding. The Subordinated Notes will be
issued only in denominations of $1,000 and integral multiples of $1,000. If we
do not make a payment of principal or interest on any payment date, our
obligation to make that payment will be deferred, if the payment is an
interest payment, until the date upon which we pay a dividend on any class of
our share capital and, if the payment is a payment of principal, until the
first business day after the date that falls six months after the original
payment date. If we fail to make a payment before the date to which payment is
deferred in this way, that failure will not constitute a default or otherwise
allow any holder to sue us for the payment or to take any other action.
Payment of principal of the Subordinated Notes may be accelerated only if we
are wound up. There is no right of acceleration if we default in the payment
of interest or in the performance of any of our covenants.
We have the option to redeem all of the Subordinated Notes as a whole on any
payment date if certain changes in the tax laws of the United Kingdom occur.
Application has been made to list the Subordinated Notes on the Luxembourg
Stock Exchange in accordance with its rules.
Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus supplement or the accompanying prospectus. Any
representation to the contrary is a criminal offense.
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Per Subordinated
Note Total
--------------------------------------------------------------------------------
Price to the Public 98.072% $245,180,000
--------------------------------------------------------------------------------
Underwriting Discounts .500% $ 1,250,000
--------------------------------------------------------------------------------
Proceeds to Us 97.572% $243,930,000
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The initial public offering price set forth above does not include accrued
interest. Interest on the Subordinated Notes will accrue from October 2, 2002
and must be paid by the purchaser.
We expect that the Subordinated Notes will be ready for delivery through the
book-entry facilities of The Depository Trust Company and its participants,
including Euroclear and Clearstream, on or about November 8, 2002.
Joint Bookrunners and Lead Managers
Banc of America Securities LLC UBS Warburg
November 1, 2002
TABLE OF CONTENTS
Prospectus Supplement
About this Prospectus Supplement......................................... S-3
Capitalization of the Group.............................................. S-4
Ratio of Earnings to Fixed Charges....................................... S-5
Description of the Subordinated Notes.................................... S-6
Certain US Federal and UK Tax Consequences............................... S-7
Underwriting............................................................. S-11
Legal Opinions........................................................... S-13
Prospectus
About this Prospectus.................................................... 1
Use of Proceeds.......................................................... 1
Description of Debt Securities........................................... 2
Description of Dollar Preference Shares.................................. 13
Description of American Depositary Receipts.............................. 21
Plan of Distribution..................................................... 26
Legal Opinions........................................................... 27
Experts.................................................................. 27
Expenses of the Issue.................................................... 27
Enforcement of Civil Liabilities......................................... 27
Where You Can Find More Information...................................... 28
Incorporation of Documents by Reference.................................. 28
Glossary................................................................. 29
----------------
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We
and the underwriters have not authorized any other person to provide you with
different information. If you receive different or inconsistent information
you should not rely on it.
We and the underwriters are not making an offer to sell these securities
in any jurisdiction where the offer or sale is not permitted.
In connection with this issue, UBS Warburg LLC, as stabilizing manager,
may over-allot or effect transactions for a limited period with a view to
supporting the market price of the Subordinated Notes at a higher level than
that which might otherwise prevail. However, there may be no obligation on the
stabilizing manager or any agent of the stabilizing manager to do this. Such
stabilization, if commenced, may be discontinued at any time and must be
brought to an end after a limited period. Any such stabilizing shall be in
compliance with all relevant laws and regulations.
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S-2
ABOUT THIS PROSPECTUS SUPPLEMENT
In this prospectus supplement, the terms "we," "our," "us" and the
"Group" refer to The Royal Bank of Scotland Group plc and its consolidated
subsidiaries.
You should assume that the information contained or incorporated by
reference in this prospectus supplement or the accompanying prospectus is
accurate as of the date on the front cover of this prospectus supplement only.
Our business, financial condition, results of operations and prospects may
have changed since that date.
We incorporate by reference our Annual Report on Form 20-F for the year
ended December 31, 2001 filed with the SEC on April 12, 2002 and our Interim
Report on Form 6-K for the six months ended June 30, 2002 furnished to the SEC
on August 7, 2002. For more information on documents incorporated by reference
you should read "Incorporation of Documents by Reference" in the accompanying
prospectus.
----------------
S-3
CAPITALIZATION OF THE GROUP
The following table, which is prepared on a consolidated basis, shows our
authorized, issued and fully paid share capital and our shareholders' funds
and indebtedness as at June 30, 2002, derived from our consolidated results
for the six months ended June 30, 2002.
As at
June 30, 2002
-------------
pound m
Share capital - authorized
Ordinary shares - shares of pound 0.25 each ................. 1,343
Additional value shares - shares of pound 0.01 each ......... 27
Preference shares (1) ....................................... 528
-------------
1,898
=============
Share capital - allotted, called up and fully paid
Ordinary shares ............................................. 721
Additional value shares ..................................... 27
Preference shares (2) ....................................... 2
-------------
750
Retained income and other reserves ............................. 26,650
-------------
Total shareholders' funds ...................................... 27,400
=============
Group indebtedness
Dated loan capital .......................................... 7,247
Undated loan capital ........................................ 6,215
-------------
13,462
=============
Debt securities in issue (3) ................................... 32,451
=============
Total indebtedness ............................................. 45,913
=============
Total capitalization and indebtedness .......................... 73,313
=============
---------------
Notes:
(1) Our authorized preference share capital as at June 30, 2002 was pound
528 million consisting of 238.5 million non-cumulative preference
shares of $0.01 each, 3.9 million non-cumulative convertible preference
shares of $0.01 each, 66 million non-cumulative preference shares of
euro 0.01 each, 3 million non-cumulative convertible preference shares
of euro 0.01 each, 900 million non-cumulative convertible preference
shares of pound 0.25 each, 1.0 million non-cumulative convertible
preference shares of pound 0.01 each, 0.9 million cumulative preference
shares of pound 1 each and 300 million non-cumulative preference shares
of pound 1 each.
(2) Our allotted, called up and fully paid preference share capital as at
June 30, 2002 was pound 2 million consisting of 106 million non-
cumulative preference shares of $0.01 each, 1.9 million non-cumulative
convertible preference shares of $0.01 each, 0.75 million
non-cumulative convertible preference shares of euro 0.01 each, 0.2
million non-cumulative convertible preference shares of pound 0.01 each
and 0.9 million cumulative preference shares of pound 1 each.
(3) As at June 30, 2002, the Group had total liabilities, including
capital and reserves, of pound 397,139 million, including deposits by
banks of pound 47,015 million and customer accounts of pound 204,800
million.
S-4
Since June 30, 2002, there have been the following changes to the
indebtedness of the Group:
o in September 2002, The Royal Bank of Scotland plc issued
pound 300 million of undated loan capital;
o in September 2002, National Westminster Bank Plc repaid $250
million of dated loan capital; and
o on October 2, 2002, we issued $750,000,000 aggregate
principal amount of Subordinated Notes due October 1, 2014.
In respect of the current offering, we will issue subordinated notes due
October 1, 2014 with an aggregate principal amount of $250,000,000. The
Subordinated Notes offered hereby are identical to, and are a further issuance
of, the series of Subordinated Notes issued on October 2, 2002.
All of the above indebtedness is unsecured.
As at June 30, 2002, the Group had contingent liabilities and guarantees
arising in the normal course of business totalling pound 13,045 million,
consisting of acceptances and endorsements of pound 2,246 million, guarantees
and assets pledged as collateral security of pound 4,970 million and other
contingent liabilities of pound 5,829 million.
Save as disclosed above, there has been no material change in the
contingent liabilities, total capitalization or indebtedness of the Group
since June 30, 2002.
RATIO OF EARNINGS TO FIXED CHARGES
Three
Six months ended Year ended months
------------------ ------------------ ended Year ended
December 31 June 30 December 31 December 31 September 30
---------------------------------------- ------------------ ------------------ ------- -----------------------------
2002 2001 2001 2000 1999 1999 1998 1997
------- ------- ------- ------- ------- ------- ------- -------
UK GAAP
- including interest on deposits............ 1.80 1.49 1.56 1.37 1.52 1.37 1.29 1.29
- excluding interest on deposits............ 6.93 5.93 6.72 4.81 6.63 5.06 4.84 4.73
US GAAP
- including interest on deposits............ 1.96 1.56 1.59 1.46 1.50 1.34 1.26 1.31
- excluding interest on deposits............ 8.11 6.61 6.98 5.77 6.46 4.73 4.55 5.04
For purposes of calculating our ratio of earnings to fixed charges,
earnings consist of income before taxes and minority interests, plus fixed
charges less the unremitted income of associated undertakings (share of
profits less dividends received). Fixed charges consist of total interest
expense, including or excluding interest on deposits, as appropriate, and the
proportion of rental expense deemed representative of the interest factor
(one-third of total rental expenses). The ratio is calculated by dividing the
amount of our earnings by the amount of our fixed charges for each period.
S-5
DESCRIPTION OF THE SUBORDINATED NOTES
The following is a summary of certain terms of this series of
Subordinated Notes. It supplements the description of the general terms of the
debt securities of any series we may issue contained in the accompanying
prospectus under the heading "Description of Debt Securities." If there is any
inconsistency between the following summary and the description in the
accompanying prospectus, the following summary governs.
General
The Subordinated Notes will constitute a separate series of subordinated
debt securities issued under a subordinated debt indenture between us and The
Bank of New York, as trustee. The summary of certain terms of the Subordinated
Notes set out below and the description contained in the accompanying
prospectus may not contain all of the information that may be important to
you. You should read the indenture, a form of which we filed with the SEC as
an exhibit to our registration statement.
The Subordinated Notes will initially be issued in the aggregate
principal amount of $250,000,000 and will be sold in minimum denominations of
$1,000 and integral multiples of $1,000. On October 2, 2002, we issued
$750,000,000 aggregate principal amount of 5% Subordinated Notes due 2014. The
Subordinated Notes offered hereby are identical to, and are a further issuance
of, that series of notes.
We may, without the consent of the holders of the Subordinated Notes,
issue additional Subordinated Notes having the same ranking and same interest
rate, maturity date, redemption terms and other terms as the Subordinated
Notes. Any such additional Subordinated Notes, together with the Subordinated
Notes offered by this prospectus supplement, will constitute a single series
of securities under the indenture. There is no limitation on the amount of
Subordinated Notes or other debt securities that we may issue under the
indenture.
The Subordinated Notes will initially be represented by one or more
global securities in registered form, without coupons attached, and will be
deposited with or on behalf of The Depository Trust Company. For a more
detailed summary of the form of the Subordinated Notes and settlement and
clearance arrangements, you should read "Description of Debt Securities - Form
of Debt Securities; Book-Entry System" in the accompanying prospectus.
Payments
The Subordinated Notes will mature on October 1, 2014. Interest on the
Subordinated Notes will accrue from October 2, 2002 on their principal amount
at the annual rate specified on the cover of this prospectus supplement, and
will be payable semi-annually in arrears on April 1 and October 1 to the
holders of record 15 calendar days prior to the date thereof, commencing on
April 1, 2003, and on maturity. Interest on the Subordinated Notes will be
calculated on the basis of a 360-day year of twelve 30-day months and, in the
case of an incomplete month, the actual number of days elapsed.
If we do not make a payment of principal or interest on any payment date,
our obligation to make that payment will be deferred, if it is an interest
payment, until the date upon which we pay a dividend on any class of our share
capital and, if it is a payment of principal, until the first business day
after the date that falls six months after the original payment date. If we
fail to make a payment before the date to which payment is deferred in this
way, that failure will not constitute a default or otherwise allow any holder
to sue us for the payment or take any other action. Each payment that is
deferred in this way will accrue interest at the annual rate shown on
S-6
the front cover of this prospectus supplement. Any payment deferred in this
way will not be treated as due for any purpose, including for the purposes of
ascertaining whether or not a Subordinated Debt Security Default (as described
in the accompanying prospectus) has occurred, until the Deferred Payment Date.
For more details you should read "Description of Debt Securities -- Payments -
Subordinated Debt Securities" and "Description of Debt Securities -- Events of
Default and Defaults; Limitation of Remedies" in the accompanying prospectus.
Redemption
We may redeem the Subordinated Notes of this series in whole but not in
part in the event of certain changes in the tax laws of the United Kingdom. In
the event of such a redemption, the redemption price of the Subordinated Notes
will be 100% of their principal amount together with any accrued but unpaid
payments of interest to the date of redemption. If we elect to redeem the
Subordinated Notes, they will cease to accrue interest from the redemption
date, unless we fail to pay the redemption price on the payment date. The
circumstances in which we may redeem the Subordinated Notes and the applicable
procedures are described further in the accompanying prospectus under
"Description of Debt Securities -- Redemption."
Waiver of Right to Set-off
By accepting a subordinated debt security, each holder and the trustee
will be deemed to have waived any right of set-off, counterclaim or
combination of accounts with respect to the subordinated debt securities or
the indenture (or between our obligations under or in respect of any
subordinated debt security and any liability owed by a holder or the trustee
to us) that they might otherwise have against us, whether before or during a
winding up of the Group.
Listing
We intend to apply for the listing of the Subordinated Notes on the
Luxembourg Stock Exchange in accordance with its rules. If the notes are
listed on the Luxembourg Stock Exchange, all notices regarding the
Subordinated Notes will, so long as the rules of the Luxembourg Stock Exchange
require, be published in a daily newspaper of general circulation in
Luxembourg, which is currently expected to be the Luxemburger Wort.
ISIN and CUSIP Numbers
The ISIN for the Subordinated Notes is US780097AL55 and the CUSIP number
is 780097 AL 5.
CERTAIN US FEDERAL AND UK TAX CONSEQUENCES
The following is a summary of certain US federal and UK tax consequences
of the acquisition, ownership and disposition of the Subordinated Notes by a
"US holder," a beneficial owner of the Subordinated Notes that is a citizen or
resident of the United States, or that otherwise will be subject to US federal
income tax on a net income basis in respect of the Subordinated Notes, that is
not connected with us for relevant tax purposes, that holds the Subordinated
Notes as capital assets and that purchases them as part of the initial
offering of the Subordinated Notes at the price set forth on the cover of this
prospectus supplement.
Although the following discussion does not purport to describe all of the
tax considerations that may be relevant to a prospective purchaser of the
Subordinated Notes, in the
S-7
opinion of Freshfields Bruckhaus Deringer, it summarizes the material UK tax
consequences to US holders of holding Subordinated Notes and in the opinion of
Davis Polk & Wardwell, it summarizes the material US federal tax consequences
to US holders of holding Subordinated Notes.
This summary does not address the tax consequences to a US holder:
o that is resident (or, in the case of an individual,
ordinarily resident) in the United Kingdom for UK tax
purposes; or
o that is a corporation which alone or together with one or
more associated corporations, controls, directly or
indirectly, 10% or more of our voting stock.
The statements regarding UK and US tax laws and practices set out below,
including those regarding the US/UK double taxation convention relating to
income and capital gains, and the US/UK double taxation convention relating to
estate and gift taxes, are based on those laws, practices and conventions as
in force and as applied in practice on the date of this prospectus supplement.
They are subject to changes in those laws, practices and conventions, and any
relevant judicial decision, after the date of this prospectus supplement. In
particular, the United Kingdom and the United States have signed a new
convention relating to income and capital gains, although it will not enter
into force until ratified by the US Senate and the UK Parliament. This summary
is not exhaustive of all possible tax considerations that may be relevant in
the particular circumstances of each US holder. You should satisfy yourself as
to the tax consequences in your own particular circumstances of the
acquisition, ownership and disposition of the Subordinated Notes.
United Kingdom
Payments. Interest that we pay on the Subordinated Notes will not be
subject to withholding or deduction for UK income tax purposes, provided that
the Subordinated Notes are and remain listed on the Luxembourg Stock Exchange
or some other "recognised stock exchange" within the meaning of Section 841 of
the Income and Corporation Taxes Act 1988.
In all other cases, UK income tax will be withheld at the lower rate
(currently 20%), unless the UK Inland Revenue has issued a direction to the
contrary, granting relief to you pursuant to the provisions of an applicable
double taxation treaty, or certain other exceptions relating to the status of
the bondholder apply. Certain US holders will be entitled to receive payments
(including payments on definitive Subordinated Notes which would, in
accordance with the foregoing, otherwise be paid after withholding of income
tax at the prescribed rate) free of UK income tax under the US/UK double
taxation convention and will under current Inland Revenue administrative
procedures be able to make a claim for the issuance of such a direction by the
UK Inland Revenue. However, such directions will be issued only on prior
application to the relevant tax authorities by the holder in question. If such
a direction is not given, we will be required to withhold tax, although a US
holder entitled to relief under the US/UK double taxation convention may
subsequently claim the amount withheld from the UK Inland Revenue.
Payments of interest on the Subordinated Notes have a UK source and may
be chargeable to UK tax by direct assessment. Where the payments are made
without withholding or deduction, the payments will not be assessed to UK tax
if you are not resident in the United Kingdom, except if you carry on a trade,
profession or vocation in the United Kingdom through a UK branch or agency in
connection with which the payments are received or to which the Subordinated
Notes are attributable, in which case (subject to exemptions for payments
received by certain categories of agent) tax may be levied on the UK branch or
agency.
S-8
Any paying agent or other person by or through whom interest is paid to,
or by whom interest is received on behalf of, an individual, may be required
to provide information in relation to the payment and the individual concerned
to the UK Inland Revenue. The Inland Revenue may communicate this information
to the tax authorities of other jurisdictions.
Disposal (including Redemption). A US holder will not, upon disposal
(including redemption) of a Subordinated Note, recognize any liability for UK
taxation on profits or gains, unless at the time of the disposal the US holder
carries on a trade, profession or vocation in the United Kingdom through a
branch or agency and the Subordinated Note was used in or for the purposes of
the trade, profession or vocation or acquired for use and used by or held for
the purposes of that branch or agency.
A US holder will not, upon transfer or redemption of a Subordinated Note,
recognize any tax charge on accrued but unpaid payments of interest, unless
the US holder at any time in the relevant year of assessment or accounting
period carried on a trade in the United Kingdom through a branch or agency to
which the Subordinated Note is attributable.
Annual Tax Charges. Corporate US holders who do not carry on a trade in
the United Kingdom through a branch or agency will not be liable to UK tax
charges or relief by reference to fluctuations in exchange rates or in respect
of profit, gains and losses arising from the Subordinated Notes.
Stamp Duty and Stamp Duty Reserve Tax. No UK stamp duty or stamp duty
reserve tax will be payable on the issue, transfer or redemption of the
Subordinated Notes.
Proposed EU Directive on taxation of savings income. The European Union
is currently considering proposals for a new directive regarding the taxation
of savings income. Subject to a number of important conditions being met, it
is proposed that Member States of the European Union will be required to
provide to the tax authorities of another Member State the details of payments
of interest or other similar income paid by a person within its jurisdiction
to or for the benefit of an individual resident in that other Member State,
subject to the right of certain Member States to opt instead for a withholding
system for a transitional period in relation to such payments.
United States
Except with respect to pre-issuance accrued interest (as described
below), payments of interest on a Subordinated Note (including any UK tax
withheld) will be includable in income by a US holder as foreign source
ordinary income for US federal income tax purposes and, with certain
exceptions, will generally constitute "passive income," or in the case of
certain US holders, "financial services income," for purposes of computing the
foreign tax credit allowable under US federal income tax laws. A US holder who
is entitled under the US/UK double taxation convention relating to income and
capital gains to any refund of UK tax withheld on a payment of interest on a
Subordinated Note will not be entitled to claim a foreign tax credit with
respect to that tax. See "-- United Kingdom -- Payments" above. The portion of
the stated interest payment payable on the first interest payment date
attributable to interest accrued on a Subordinated Note prior to November 8,
2002 ("pre-issuance accrued interest") will be treated as a return of the pre-
issuance accrued interest rather than as a payment of interest on the
Subordinated Note.
A US holder will, upon sale, exchange or redemption of a Subordinated
Note, generally recognize capital gain or loss for US federal income tax
purposes in an amount equal to the difference between the amount realized (not
including amounts received that are attributable to
S-9
accrued and unpaid interest which has not been included in income, which will
be taxable as ordinary interest income) and the US holder's tax basis in the
Subordinated Note. Any gain or loss will generally be US source. You should
consult your own tax advisor regarding the US federal tax treatment of capital
gain or loss.
S-10
UNDERWRITING
We and the underwriters for the offering named below (the "Underwriters")
have entered into an underwriting agreement and a pricing agreement with
respect to the Subordinated Notes. Subject to certain conditions, we have
agreed to sell to the Underwriters and each Underwriter has severally agreed
to purchase the principal amount of Subordinated Notes indicated opposite such
Underwriter's name in the following table.
Principal Amount
Underwriters of Subordinated
------------ Notes
----------------
Banc of America Securities LLC.............................. $125,000,000
UBS Warburg LLC............................................. $125,000,000
----------------
Total ................................................. $250,000,000
================
Subordinated Notes sold by the Underwriters to the public will initially
be offered at the initial public offering price set forth on the cover of this
prospectus supplement. Any Subordinated Notes sold by the Underwriters to
securities dealers may be sold at a discount from the initial public offering
price of up to 0.30% of the principal amount of the Subordinated Notes. Any
such securities dealers may resell any Subordinated Notes purchased from the
Underwriters to certain other brokers or dealers at a discount from the
initial public offering price of up to 0.25% of the principal amount of the
Subordinated Notes. If all the Subordinated Notes are not sold at the initial
public offering price, the Underwriters may change the offering price and the
other selling terms.
Application has been made for the listing of the Subordinated Notes on
the Luxembourg Stock Exchange. The Subordinated Notes (including the
$750,000,000 principal amount of Subordinated Notes issued on October 2, 2002)
are a new issue of securities with no established trading market. We have been
advised by the Underwriters that the Underwriters intend to make a market in
the Subordinated Notes, but they are not obligated to do so and may
discontinue market-making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Subordinated Notes.
It is expected that delivery of the Subordinated Notes will be made
against payment on or about the date specified in the last paragraph of the
cover page of this prospectus supplement, which will be the fifth business day
following the date of pricing of the notes (such settlement cycle being
referred to as "T+5"). Trades in the secondary market generally are required
to settle in three business days, unless the parties to any such trade
expressly agree otherwise. Accordingly, purchasers who wish to trade notes on
the date of pricing or the next business day will be required, by virtue of
the fact that the Subordinated Notes initially will settle in T+5, to specify
an alternate settlement cycle at the time of any such trade to prevent a
failed settlement. Purchasers of Subordinated Notes who wish to trade
Subordinated Notes on the date of pricing or the next business day should
consult their own advisors.
In connection with the offering, the Underwriters may purchase and sell
Subordinated Notes in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the Underwriters of a greater
aggregate principal amount of Subordinated Notes than they are required to
purchase from us in the offering. Stabilizing transactions consist of certain
bids or purchases made for the purpose of preventing or retarding a decline in
the market price of the Subordinated Notes while the offering is in progress.
S-11
The Underwriters may also impose a penalty bid. This occurs when a
particular Underwriter repays to the Underwriters a portion of the
underwriting discount received by it because the Underwriters have repurchased
Subordinated Notes sold by or for the account of such Underwriter in
stabilizing or short-covering transactions.
These activities by the Underwriters may stabilize, maintain or otherwise
affect the market price of the Subordinated Notes. As a result, the price of
the Subordinated Notes may be higher than the price that otherwise might exist
in the open market. If these activities are commenced, they may be
discontinued by the Underwriters at any time. These transactions may be
effected on the Luxembourg Stock Exchange, in the over-the-counter market or
otherwise.
We estimate that our share of the total expenses of the offering,
excluding underwriting discounts and commissions, will be approximately
$350,000. The Underwriters have agreed to reimburse us for certain expenses of
the offering.
We have agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
In the ordinary course of their respective businesses, the Underwriters
and their affiliates have engaged, and may in the future engage, in investment
banking and commercial banking transactions with us or our affiliates.
The Subordinated Notes are offered for sale only in jurisdictions where
it is legal to make such offers. No Subordinated Notes are being offered to
the public in the United Kingdom.
Each Underwriter has represented and agreed that it has not directly or
indirectly offered or sold, and will not directly or indirectly offer or sell,
in the Netherlands any of the Subordinated Notes with an aggregate amount of
less than euro 50,000 (or its foreign currency equivalent) other than to persons
who trade or invest in securities in the conduct of a profession or business
(which include banks, stockbrokers, insurance companies, pension funds, other
institutional investors and finance companies and treasury departments of
large enterprises) unless one of the other exemptions from or exceptions to
the prohibition contained in article 3 of the Dutch Securities Transactions
Supervision Act 1995 (Wet toezicht effectenverkeer 1995) is applicable and the
conditions attached to such exemptions or exception are complied with.
Each Underwriter has agreed that: (a) it has not offered or sold and,
prior to the expiry of a period of six months from the date of issue of the
Subordinated Notes, will not offer or sell any Subordinated Notes to persons
in the United Kingdom except to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995; (b) it has only communicated or caused to be communicated
and will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of section 21
of the UK Financial Services and Markets Act 2000 (the "FSMA")) received by it
in connection with the issue or sale of any Subordinated Notes or any
investments representing the Subordinated Notes in circumstances in which
section 21(1) of the FSMA does not apply to us; and (c) it has complied and
will comply with all applicable provisions of the FSMA with respect to
anything done by it in relation to the Subordinated Notes or any investments
representing the Subordinated Notes in, from or otherwise involving the United
Kingdom.
Banc of America Securities LLC ("BASL") will make the securities
available for distribution on the internet through a proprietary web site and/
or a third-party system operated by
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Market Axess Inc., an internet-based communications technology provider.
Market Axess Inc. is providing the system as a conduit for communications
between BASL and its customers and is not a party to any transactions. Market
Axess Inc., a registered broker-dealer, will receive compensation from BASL
based on transactions BASL conducts through the system. BASL will make the
securities available to its customers through the internet distribution,
whether made through a proprietary or third-party system, on the same terms as
distributions made through other channels.
LEGAL OPINIONS
Our US counsel, Davis Polk & Wardwell, and US counsel for the
underwriters, Sidley Austin Brown & Wood, will pass upon the validity of the
Subordinated Notes. Our Scottish solicitors, Dundas & Wilson C.S., will pass
upon the validity of the Subordinated Notes under Scots law. Our English
solicitors, Freshfields Bruckhaus Deringer, will pass upon certain matters of
English law relating to the issue and sale of the securities. Davis Polk &
Wardwell, Sidley Austin Brown & Wood, and Freshfields Bruckhaus Deringer will
rely upon the opinion of Dundas & Wilson C.S. with respect to all matters of
Scots law, and Davis Polk & Wardwell and Sidley Austin Brown & Wood will rely
upon the opinion of Freshfields with respect to certain matters of English
law.
S-13
[GRAPHIC OMITTED] The Royal Bank of Scotland Group plc
$250,000,000
5% Subordinated Notes due 2014
----------------
Prospectus Supplement
November 1, 2002
(To Prospectus dated November 23, 2001)
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Banc of America Securities LLC UBS Warburg