Major franchise in U.K. and global wholesale banking Very strong business diversification Growing geographic diversity Good liquidity Improved capital policy Mixed earnings prospects Material role for enlarged Global Banking and Markets business increases earnings volatility Weakening credit trends in its three main banking markets Management credibility tarnished by the ABN AMRO transaction The ratings on The Royal Bank of Scotland Group PLC (RBSG)--the ultimate holding company of The Royal Bank of Scotland PLC (RBS; AA/Negative/A-1+)--reflect its very strong business profile, broad diversification, and strong earnings capacity. We consider that RBSG's change in its capital policy marginally outweighs the negative ratings impact of its misjudged transaction for ABN AMRO Bank N.V. (AA-/Developing/A-1+) and material credit market related write-downs. RBSG is one
