Floating Rate Note Issue Investor Presentation. March 2006

Transcription

1 Floating Rate Note Issue Investor Presentation March 2006

2 Disclaimer Slide 2 This document is being furnished to you solely for your review and may not be reproduced or redistributed, in whole or in part, directly or indirectly, to any other person. This presentation was prepared in order to indicate, on a preliminary basis, the feasibility of a possible transaction and does not carry any right of publication or disclosure to any other party. Neither this presentation nor any of its contents may be used for any other purpose without the prior written consent of Ulster Bank Ireland Limited ( UBIL ) and The Royal Bank of Scotland plc ( the Manager ). This document has been prepared for information purposes only. It does not constitute a prospectus or other offering document in whole or in part. Information contained in this document is a summary only, and is qualified in its entirety by reference to the offering document issued in respect of the transaction described in this document (the Offering Document ). It is strongly recommended that each investor should read the Offering Document for more complete information regarding this offering before making an investment decision. To request a copy of the Offering Document please contact your usual salesperson. This document shall not constitute an offer to sell or solicitation of an offer to buy any security. There shall be no sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification under securities laws of such state or jurisdiction. The information contained in this document is confidential and is intended only for use by the recipient. By reviewing this presentation each recipient is deemed to represent that it is a sophisticated investor and possesses sufficient investment expertise to understand the risks involved in the offering and that it is a person into whose possession this document may be lawfully delivered in accordance with the laws of the jurisdiction in which it is located. Investors must rely solely on their own examinations of the Offering Document and the offering in making a determination as to whether to invest in the securities offered. The information in this presentation is based upon management forecasts and reflects prevailing conditions and management s views as of this date, all of which are subject to change. Although the statements of fact in this document have been obtained from and are based upon sources that UBIL believes to be reliable, UBIL does not represent or warrant in any way as to their accuracy, and any such information may be incomplete or condensed. All opinions and estimates included in this document constitute the UBIL s judgment as of the date of this presentation and are subject to change without notice. The Manager, and its affiliates, connected companies, employees or clients may have an interest in the securities (or related securities or other financial instruments or their related derivatives) ( Securities ) mentioned in this document. This may involve activities such as dealing in, holding, acting as market-makers, or performing financial or advisory services, in relation to any of the Securities referred to in this document. They may also have acted as managers or co-managers of a public offering of such Securities, and may also have an investment banking relationship with any companies mentioned in this document. This presentation is not being distributed to and must not be passed on to the general public in the United Kingdom, the Republic of Ireland or in any other jurisdiction. This communication is only directed to those persons in the United Kingdom who are within the definition of Investment Professionals (as defined in the FSMA (Financial Promotions) Order 2001). Accordingly, this communication is directed only at persons having professional experience in matters relating to investments. The securities discussed herein have not been and will not be registered under the US Securities Act of 1933, as amended (the Securities Act ), under applicable state securities laws, or under the laws of any other jurisdiction. The securities will be offered outside the United States to persons who are not US Persons (as defined in Regulation S) in offshore transactions in reliance on regulation S ( Regulation S ) under the Securities Act and, in each case, in accordance with applicable laws. The Royal Bank of Scotland plc is authorised and regulated by the U.K. Financial Services Authority.

3 Donal Corbett Ulster Bank Group Head of Debt Capital Markets Funding Ben Franz-Marwick RBS Investor Relations

4 Agenda Slide 4 RBS Group Overview Ulster Bank Group Business Profile Financial Review Funding Strategy Economic Outlook Summary

5 RBS Group Overview

6 RBS Group Overview Slide 6 Founded in 1727, RBS Group is one of the world's leading financial services groups Acquired NatWest Plc in March 2000 and Charter One in August 2004 Group ranks 2 nd in UK, 3 rd in Europe and 8 th in the world by market capitalisation compared to other global financial peers (Source: Datastream, 28 February 2006) As at 31 st December 2005, the group had assets of 777 billion, pre-tax profit of 7.9 billion, and employed approximately 137,000 staff. The group has generated consistent income, profit and earnings growth over the last five years Both RBS plc and NatWest Plc have the following credit ratings: S&P AA A-1+ Moody s Aa1 P-1 Fitch AA+ F1+

7 RBS Group Structure Slide 7 CUSTOMERS Ulster Bank First Active Personal Business Corporate Direct Line Churchill Privilege NIG International RBS NatWest Direct brands Coutts Personal Small business Credit cards Wealth management RBS NatWest RBS Greenwich Capital Commercial Mid-corporate Large corporate Financial institutions Citizens Charter One Personal Business Commercial Mid-corporate Ulster Bank RBS Insurance Retail Markets Corporate Markets Citizens MANUFACTURING Technology Operations Services Retail Markets: Retail Banking + Retail Direct + Wealth Management

8 Corporate Structure Slide 8 The Royal Bank of Scotland Group plc (rated Aa2/AA/AA- by Moody s/fitch/s&p) The Royal Bank of Scotland plc (rated Aa1/AA+/AA by Moody s/fitch/s&p) Acquired in March 2000 National Westminster Bank plc (rated Aa1/AA+/AA by Moody s/fitch/s&p) Acquired in 1917 Ulster Bank Limited (rated Aa2/AA/AA by Moody s/fitch/s&p) Acquired in Jan 2004 Ulster Bank Finance Plc Ulster Bank Ireland Limited* (rated Aa2/AA/AA by Moody s/fitch/s&p) * Regulated by the Irish Financial Services Regulatory Authority First Active Plc* (rated Aa2/AA by Moody s/fitch)

9 Ulster Bank Group Business Profile

10 UBG Organisation Chart Slide 10 UB Group Chief Executive RBS Group Retail - Ulster Bank + First Active Corporate Banking and Financial Markets Group Corporate Affairs and Legal Services Group HR Group Risk Management Group Finance Manufacturing Internal Audit Sales management Retail Direct Finance and corporate support Retail development Marketing Business & Corporate banking Specialised Finance Inward Investment and Marketing FA Commercial business CB & FM Finance Financial Markets Group Secretary Corporate Affairs and Communications Legal Services Resourcing & recruitment Development Policy & Employment Credit Risk UB + FA Operational risk Regulatory risk Decision support Group Treasury Group Tax Financial strategy Integration Financial projects Shared Services IT & Telephony Payment ops Mortgage ops Customer serv centre Group property Group purchasing

11 Business profile Slide 11 Ulster Bank is a full service clearing bank covering the island of Ireland i.e. both the Republic of Ireland (Ulster Bank Ireland Limited) and Northern Ireland (Ulster Bank Limited) First Active is a Mortgage, Savings and Investment operation in the Republic of Ireland Both brands will be retained The Ulster Bank Group is run as an integrated entity In total there are 181 branches in the Republic of Ireland and 90 branches in Northern Ireland 1.6 million customers 6,000 staff

12 Business profile (cont d) Slide 12 Retail Banking (includes Retail Ulster and Retail First Active) Branch banking (full range of products for retail customers) Mortgages Wealth management (insurance & investment products, trust & wills services) Direct banking (includes Cards, Internet and Telephone) Corporate Markets structured finance money market activities foreign exchange interest rate risk management solutions invoice financing asset finance international banking services offshore financial services

13 Distribution Reach - Branch Networks Slide UB Branches in NI First Active Ulster Bank

14 Market Position Retail Banking (Republic of Ireland) Slide 14 Ulster Bank Group (ROI) - Stock Ulster Bank Group (ROI) - Flow 16% 14% 12% 10% 8% 6% 4% 2% 0% 11% Current accounts 6% 6% Savings accounts Personal loans 9% Credit cards 15% #3 #5 #4 #3 #2 Mortgages 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 8% Current accounts 6% Savings accounts 5% Personal loans 15% Credit cards 18% #4 #5 #4 #3 #1/#2 Mortgages Source: Mori Financial Services 2005

15 Market Position Retail Banking (Northern Ireland) Slide 15 Ulster Bank Group (NI) - Stock Ulster Bank Group (NI) - Flow 30% 25% 25% 30% 25% 27% 20% 15% 10% 5% 17% 11% 13% 5% #1 #3 #2 #1 #6 20% 15% 10% 5% 16% 12% 9% 5% #1 #5 #1 #1 #6 0% Current accounts Savings accounts Personal loans Credit cards Mortgages 0% Current accounts Savings accounts Personal loans Credit cards Mortgages Source: Mori Financial Services 2005

16 Market Position Small & Medium Enterprises (RoI) Slide 16 Ulster Bank Group (ROI) - Flow 16% 14% 13% 12% 11% 10% 10% 10% 8% 6% 4% 12% 14% 2% #3 #3 #3 #3 #4 #3 0% Main Current account Main Deposit account Main loan Corporate credit cards Leasing / Contract hire Foreign X / Treasury Source: Financial Services Survey 2005 conducted by TNS mrbi

17 Market Position Small & Medium Enterprises (NI) Slide 17 Ulster Bank Group (NI) - Flow 35% 30% 25% 27% 29% 20% 19% 15% 10% 14% 24% 5% #1 #1 #1 #4 #1 0% Main current account Main deposit account Main loan account Corporate credit card Int'l banking services Source: Financial Services Survey 2005 conducted by PricewaterhouseCoopers

18 Financial Review

19 UBG Financial Performance Slide Change m % Total income Direct expenses Impairment losses Contribution bn Loans & advances Customer deposits RWAs Good customer recruitment 31% growth in mortgages 14% growth in business loans Enhanced current accounts First Active on track

20 2005 Operating Highlights Slide 20 Added 68,000 personal and business customers Number one bank in Northern Ireland Number one mortgage lender in Ireland First to offer 100% Mortgage for first time buyers in Northern Ireland and the Republic of Ireland under the Ulster Bank and First Active brands First to give transaction fee-free banking automatically to all customers in Northern Ireland (November 05) and the Republic of Ireland (February 06)

21 2005 Operating Highlights (cont d) Slide 21 Awarded Corporate Banking Excellence Award Entered a 10-year partnership with the University of Limerick Expanded the Branch network Investing 75 million in branch and brand improvement programme 'Best Companies in Ireland to Work For 2005', the Great Place to Work Institute Best Practice in recruitment and employment of people with disabilities O2 Ability Awards

22 Consistency & Diversity of Income Slide 22 Consistent, Strong Income Growth Diversified Income Streams Cumulative Income Growth (%) 180% 160% 140% 120% 100% 80% 60% First Active 14% UB Corporate 34% Financial Markets 9% UB Retail 43%

23 Asset Quality Slide Risk Elements In Lending and Potential Problem Loans as % of gross loans and advances 1.23% 1.84% Impairment losses as % of gross loans and advances 0.2% 0.2% Closing impairment provisions as % of REILs and PPLs 51% 53%

24 Funding Strategy

25 UBG Funding Breakdown Dec 2005 Slide 25 Corporate Deposits 13% Other liabilities 4% Interbank 12% Intra Group 8% Capital 7% Retail 27% Term debt 7% Securitisation 6% short dated 16% Total Resources Stg 40bn

26 Funding Strategy Slide 26 Funding for RBS Group is raised centrally and distributed to subsidiaries as required UB will fund itself selectively where it is prudent to do so through: Continued growth in customer deposits (17% growth 05 v 04) Opportunities exist to increase access to competitively priced wholesale Debt Capital Markets issuance through: FRN s Securitisation Inter-bank money markets Euro Commercial Paper Certificates of Deposit (CD s)

27 Economic outlook

28 ROI - Economic Background & Medium Term potential Slide 28 Business & consumer confidence strong Investment strong Labour market performance very strong Q1-Q3 2005, GNP 4.9% Strong fiscal situation Potential growth rate 4½% - 5% Boosted in short term by release of SSIA savings Labour supply limited, so inward migration essential to achieve growth potential Policies on competitiveness and infrastructure spend essential to achieve growth potential

29 Northern Ireland Economy Slide 29 Has traditionally grown in line with UK trend average of 2.5% per annum It outperformed after the Belfast agreement (1998), but GDP per capita is still below UK average It has potential to further outperform given the right conditions Focus on tourism and on improving the public/private sector imbalance Activity indicators which were depressed in 2005 have picked up recently Some concerns regarding public sector cut backs and higher charges

30 Summary Slide 30 Strong franchise in both ROI and NI market No. 1 bank in NI No. 3 bank in ROI (No.1/no.2 in mortgages) Strong organic growth momentum Economy Future growth underpinned by strong economic outlook Prospects supported through ownership and very strong linkages to RBSG Access to capital, funding, technology and infrastructure