RBS Group

RBS Group, or the Royal Bank of Scotland Group, is by the largest company in the world by assets owned. It is a British government owned banking company that has operations throughout the world and across a wide range of financial products. RBS Group has a range of investment banking and wealth management operations. In investment banking RBS controls RBS Securities, formerly RBS Greenwich Capital. It is based in Greenwich, Connecticut and is one of the leading fixed income firms in the capital markets. It underwrites, trades and distributes fixed income debt products meaning that it can offer a full range of investment services, risk management and debt financing to a range of large clients, including governments and large corporations. It was founded as an independent investment house in 1981 and was bought up in 1996 by the British bank NatWest which then was sold to the Royal Bank of Scotland in 2003 taking Greenwich Capital with them.

RBS Group is very strong in the wealth management field, owning one of the top international private banks, Coutts & Co, which it inherited when it took over NatWest. Among the clients of Coutts & Co is the British royal family. It is the largest private bank in the UK. Other private banks that are within the RBS Group include the Scottish bank Adam & Company, the seventeenth century bank Child & Co and Drummonds Bank. Private banking provides a more fully serviced level of personal banking than a normal retail current account. They are aimed at the very wealthy and pride themselves on the level of service and advice that they can provide.

There are two offshore banks within the RBS Group that are used by wealthy individuals to keep their money in a more friendly tax regime. They are the Royal Bank of Scotland International based in the Channel Islands and the Isle of Man Bank. Both the Channel Islands and the Isle of Man are dependencies of the British crown that set their own tax laws and are seen by some as “tax havens”. RBS has since being taken over by the British government come under criticism for aiding tax evasion. The criticism became so intense that it shut down a division that was alleged to be involved in this practice.

NatWest Stockbrokers are retail stockbrokers that serve a largely English market and are aimed at small investors. They are branded with “NatWest” which is a large English branch network that is run by the Royal Bank of Scotland.

The Royal Bank of Scotland is majority owned by the British Government, whose current stake is over 80%. For almost all of its life since its foundation in the eighteenth century it had been a privately owned and publicly traded company. It was one of the two main banks in Scotland with an extensive branch network, but it was small in the much larger English market and mainly focused on business clients.

Due to a rash expansion program in the 1990s, that involved the purchase of a large number of assets including the English banking giant NatWest it did not have enough money to carry on business when the money markets stopped lending during the credit crunch. In the aftermath of the bankruptcy of the American investment bank Lehman Brothers it too became functionally bankrupt along with the Halifax Bank of Scotland which was the other large Scottish bank. The British government agreed to bail out the Royal Bank of Scotland in 2008 but in return for a majority stake in the company which meant that the original shareholders less than 20% of the company they originally owned.