The ratings on Royal Bank of Scotland Group PLC (RBSG), the ultimate holding company of Royal Bank of Scotland PLC (Royal Bank; AA/Stable/A-1+) and National Westminster Bank PLC (NatWest; AA/Stable/A-1+), recognize the successful integration of NatWest and the strong business positions that this acquisition has achieved. The ratings also reflect the superior earnings performance of the group, which has fuelled a marked recovery in its balance sheet since the completion of the transaction in 2000. While internal capital generation has allowed brisk lending growth, asset quality remains robust. Given that--prior to the acquisition--NatWest was about twice the size of Royal Bank, the latter's status and franchise have been transformed, and the combined group enjoys a dominant position in a number
