The ratings on Royal Bank of Scotland PLC (Royal Bank) reflect the strong profitability of the bank's core business, the diversified nature of its other operations, and the strong presence in its home market in Scotland. They also benefit from Royal Bank's affiliation with National Westminster Bank PLC (AA-/Stable/A-1+), which was taken over by Royal Bank's parent, Royal Bank of Scotland Group PLC (RBSG; A+/Stable/A-1) in March 2000. This merger will adversely impact the capitalization of the combined companies, however. In addition to tripling its size, the takeover makes the combined group one of the largest banks in the world, and transforms its franchise in the U.K., where it will be the second-largest retail bank and the largest corporate bank.
