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Financial highlights

Highlights of 2006

Group operating profit up 14% to £9.4 billion
Profit before tax up 16% to £9.2 billion
Total dividend for the year of 90.6p per share, up 25%
Share repurchase of £1 billion completed
Income up 10% to £28.0 billion
Cost: income ratio improved from 42.4% to 42.1%
Adjusted earnings per ordinary share up 14% to 200.0p

Income(£m)

Graph showing income for the past 3 years. 2006: £28,002 million

The Group's total income grew by 10% to £28,002 million in 2006.

Profit before tax (£m)

Graph showing profit before tax for the past 3 years. 2006: £9,186 million

Group profit before tax rose by 16% to £9,186 million in 2006.

Adjusted cost:income ratio (%)

Graph showing adjusted cost to income ratio for the past 3 years. 2006: 42.1%

The Group's cost:income ratio was 42.1%. The cost:income ratio is calculated excluding purchased intangibles amortisation, integration costs and net gain on sale of strategic investments and subsidiaries, and after netting operating lease depreciation against rental income.

Adjusted earnings per share (pence)

Graph showing adjusted earnings per share for the past 3 years. 2006: 200 pence

Earnings per share increased by 14% to 200.0p for 2006, adjusted for purchased intangibles amortisation, integration costs, and net gain on sale of strategic investments and subsidiaries in 2005, and in 2002–2003 for the AVS dividend.

Group operating profit – profit before tax, purchased intangibles amortisation, integration costs, and net gain on sale of strategic investments and subsidiaries in 2005 (£m)

Graph showing Group operating profit – profit before tax, purchased intangibles amortisation, integration costs, and net gain on sale of strategic investments and subsidiaries in 2005. 2006: £9,414 million

Group operating profit increased by 14% to £9,414 million in 2006.

Dividend per ordinary share (pence)

Graph showing dividend per ordinary share for the past 3 years. 2006: 90.6 pence

The directors have recommended a final dividend of 66.4p per ordinary share which, when added to the interim dividend of 24.2p, makes a total for 2006 of 90.6p, an increase of 25%.

Note:
The accounts are prepared in accordance with International Financial Reporting Standards. Certain standards relating to financial instruments were not adopted until January 2005. The Group has provided comparative information on a pro forma basis that includes the estimated effect of these standards for the year ended 31 December 2004.

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Total shareholder return performance

The graph illustrates the performance of the company over the past five years in terms of total shareholder return compared with that of the companies comprising the FTSE 100 Index. This Index has been selected because it represents a cross-section of leading UK companies. The total shareholder return for the company and the FTSE 100 have been rebased to 100 for 2001.

Complex graph showing the performance of the company over the past five years in terms of total shareholder return compared with that of the companies comprising the FTSE 100 Index

Market capitalisation (£bn)

Graph showing market capitalisation since 2002. 2006: £62.8 billion

The Group's market capitalisation at 31 December 2006 was £62.8 billion compared with £56.1 billion a year earlier.

Share price performance

	2005	2006	% change
RBS	1755.0	1993.0	+14
FTSE 100	5618.8	6220.3	+11
FTSE 350 Banks	10,240.7	11,263.5	+10