Abnamro Report

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I. INTRODUCTION

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1. INTRODUCTION:

My internship at ABN AMRO for six weeks was a worthwhile experience. The reason I

dropped my resume at ABN AMRO is because of its international status and its

reputation as one of the best banks in Pakistan with the most professional banking

experience. I was called for the interview with the branch manager of Gulberg branch

Syed Omer Sharif Bukhari. The interview went very well and I was called in to start my

internship the following day. I was allotted to stay at the Gulberg branch which is one of

the main branches of Lahore and is ranked in the top three branches of the region. Being

an intern there gave me a chance to get the needed exposure of the banking systems.

While working as a branch banking internee, we observed that the ABN AMRO

management was in the middle of a change as the bank was merging with Royal Bank of

Scotland all throughout Pakistan during this time of my internship. Prime Bank Ltd of

Gulberg branch was recently replaced by ABN AMRO and during my internship time I

got to work with a combination of Prime Bank and ABN AMRO employees working

together for ABN AMRO. This Branch had been settling itself into ABN AMRO

policies while another change in management and policies of Royal Bank of Scotland

was to be made.

This report includes all information on history and management of both ABN AMRO and

Royal Bank of Scotland, the department descriptions and analysis on the work I did as an

internee at ABN AMRO bank before it changed over to Royal Bank of Scotland.

In this report, I have written about everything I learned during my six weeks of internship

of ABN AMRO and while it was changing over to Royal Bank of Scotland.

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2. ABN-AMRO AND RBS MERGE:

ABN AMRO had come to a crossroads in the beginning of 2007. There had been some

calls, over the prior couple of years, for ABN AMRO to break up, to merge, or to be

acquired. On February 21, 2007, the call came from the TCIhedge fund which asked the

Chairman of the Supervisory Board to actively investigate a merger, acquisition or

breakup of ABN AMRO, stating that the current stock price didn't reflect the true value

of the underlying assets. TCI asked the chairman to put their request on the agenda of the

annual shareholders' meeting of April 2007.

Events accelerated when on March 20 the BritishbankBarclays and ABN AMRO both

confirmed they were in exclusive talks about a possible merger. On March 28, ABN

AMRO published the agenda for the shareholders' meeting of 2007. It included all items

requested by TCI, but with the recommendation not to follow the request for a breakup of

the company.

However, on April 13, the Royal Bank of Scotland (RBS) contacted ABN AMRO to

propose a deal in which a consortium of banks, including RBS, Belgium's Fortis, and

Spain's Banco Santander Central Hispano (now Banco Santander) would jointly bid for

ABN AMRO and thereafter break up the different divisions of the company between

them. According to the proposed deal, RBS would take over ABN's Chicago operations,

LaSalle, and ABN's wholesale operations; while Banco Santander would take the

Brazilian operations and Fortis, the Dutch operations.

On April 23 ABN AMRO and Barclays announced the proposed acquisition of ABN

AMRO by Barclays. The deal was valued at 67billion. Part of the deal was the sale of

LaSalle Bankto Bank of America for 21 billion.

Two days later the RBS-led consortium brought out their indicative offer, worth 72

billion, if ABN AMRO would abandon its sale of LaSalle Bank to Bank of America.

During the shareholders' meeting the next day, a majority of about 68% of the

shareholders voted in favour of the breakup as requested by TCI.

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The sale of LaSalle was seen as obstructive by many: as a way of blocking the RBS bid,

which hinged on further access to the US markets, in order to expand on the success of

the group's existing American brands, Citizens Bank and Charter One. On May 3, 2007,

the Dutch Investors' Association (Vereniging van Effectenbezitters), with the support of

shareholders representing up to 20 percent of ABN's shares, took its case to the Dutch

commercial court in Amsterdam, asking for an injunction against the LaSalle sale. The

court ruled that the sale of LaSalle could not be viewed apart from the current merger

talks of Barclays with ABN AMRO, and that the ABN AMRO shareholders should be

able to approve other possible merger/acquisition candidates in a general shareholder

meeting. However in July 2007, the Dutch Supreme Court ruled that Bank of America's

acquisition of LaSalle Bank Corporation could proceed. Bank of America absorbed

LaSalle effective October 1, 2007.

On October 9, the RFS consortium led by Royal Bank of Scotland, bidding for control of

ABN AMRO, formally declared victory after shareholders, representing 86 percent of the

Dutch banks shares, accepted the RFS groups 70bn offer. This level of acceptance

cleared the way for the consortium to take formal control. The group declared its offer

unconditional on October 10, when Fortis completed its 13bn rights issue. Thus the

financing required for the groups 38-a-share offer, which included 35.60 in cash, was

realised. Rijkman Groenink, Chairman of the Managing Board of ABN AMRO, who

heavily backed the Barclays offer, decided that he would step down.

Royal Bank of Scotland (RBS) Group formally re-branded ABN AMRO branches in

Pakistan. Pakistan is among the first Asian markets where ABN AMRO has been re-

branded as RBS effective from August 1, 2008 as approved by local regulators. ABN

AMRO Bank (Pakistan) Ltd is now officially renamed as The Royal Bank of Scotland

Ltd. This follows the successful global acquisition of ABN AMRO in October 2007 by

an RBS-led consortium.

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Today marks an important milestone for the integration of RBS and ABN AMROs

businesses and we are thrilled that Pakistan is one of the very first countries to reach this

milestone in Asia Pacific, John McCormick, Chief Executive Global Banking &

Markets for Asia Pacific, RBS said and maintained the global expertise as a group

combined with local capabilities would further strengthen the position in Pakistan

allowing them to meet clients needs through innovative and integrated solutions and

accelerate their growth plans for the region.

To mark this exciting new chapter, RBS will also launch two new retail banking

products, Royal Preferred Banking (previously known as Van Gogh Preferred Banking)

and RBS Islamic Banking (previously known as ABN AMRO Islamic Banking) in the

country, making it the first Asian market to be introduced with these products.

We are very excited and proud to be part of the RBS Group. RBS has entered Pakistan

with a head start as one of the largest foreign banks in Pakistan enjoying 60 years of

heritage and total assets of Rs117 billion across a network base of 79 branches spanning

24 cities. The combined strengths of RBS and ABN AMRO will offer local clients more

sophisticated products and services with global accessibility and world class efficiency,

Shehzad Naqvi, RBS Chief Executive Officer in the country said.

A press statement of the bank said presently RBS was the second largest financial

services group by profit, with an AA- credit rating with total assets of 1,900.5 billion

pound sterling as of December 31, 2007.

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II. HISTORY

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1. HISTORY OF ABN-AMRO

ABN AMRO is a Dutch Bank, currently owned by a consortium of Royal Bank of

Scotland Group, Fortis, and Banco Santander. The bank is the result of the 1990-91

merger of AMRO and ABN, whose history dated back to the founding of the

Nederlandsche Handel-Maatschappij in 1824.

Between 1991 and 2007, ABN Amro was one of the largest banks in Europe and had

operations in about 63 countries around the world. In 2007 the bank was acquired by the

consortium, which are splitting up the bank between themselves. This process will take

till the end of 2009. The American retail assets had been sold by ABN AMRO to Bank of

America in the months leading up to the acquisition.

Nederlandsche Handel-Maatschappij, 1824-1964

Trading roots, 1824-1864

Nederlandsche Handel-Maatschappij (Netherlands Trading

Society/NTS) was founded on the initiative of the

Merchant Monarch, King Willem I, in the Hague on 29

March 1824. The object was to resuscitate national trade

and industry in the wake of the period of French rule (1795-1813). NTS was an

import/export company set up to expand existing trade relations and open up new

channels.

Through its close ties with the Dutch government, NTS

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King Willem I was thefounder of NederlandscheHandel-Maatschappij in 1824;painting by Jan Willem
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played a major role in developing trade between the Netherlands and the Dutch East

Indies. From 1826 onwards its activities in the East Indies were co-ordinated by the

branch in Batavia (present day Jakarta, known locally as "De Factorij"). In 1830, the

Dutch Governor Johannes van den Bosch introduced the "Plantation System" under

which the native population was compelled to pay taxation in kind (chiefly tea, coffee,

sugar and spices). NTS acted as state banker, merchant and shipping agent. It sold and

shipped the products the Dutch government obtained through the Plantation System. NTS

did this so successfully and attracted so much business that it acquired the nickname

"Kompenie Ketjil", or "Little Company", after the older and more

famous Dutch East India Company.

After 1830, when the Netherlands and Belgium became separate states, NTS alsoprovided risk and loan capital to industrial enterprises, especially in the textile industry in

the Twente region of the Netherlands. In 1850, NTS began to finance companies

operating plantations in the Dutch East Indies. NTS even owned a number of plantations

itself. As part of this policy, a branch was opened in Singapore in 1858. Its successor is

now the oldest bank in Singapore.

Post-war readjustments, 1945-1964

After the Second World War, NTS opened a

large number of branches both in the

Netherlands, where the number of branches was

doubled to 153, and abroad. Its plantations in

Indonesia were nationalised in 1959 and the

same fate befell its banking business in the

former Dutch colony just one year later.

The growing concentration of banking in the Netherlands reached a climax in October

1964 when NTS and Twentsche Bank merged to become Algemene Bank Nederland

(ABN Bank).

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Head office Nederlandsche Handel-Maatschappij, Herengracht 466,

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Twentsche Bank, 1861-1964

Textile origins, 1861-1917

Originally a notary public in Enschede, Benjamin Willem

Blijdenstein Jr. (1811-1866) moved into the banking business in

1841. His primary target group was the textile industry in the

Twente region in the eastern part of the Netherlands. With

the growth of textile exports to south-east Asia, he opened a

branch in London in 1858 that was managed by his son and

successor B.W. Blijdenstein. Today, it is the oldest surviving

branch of a foreign bank in the City. This British connection

greatly facilitated financial transactions between London

(import of raw materials and sales to south-east Asia), Enschede in the Twente region

(production) and Amsterdam (exports to the Dutch East Indies).

Twentsche Bankvereeniging was established in Amsterdam on 24 June 1861 as a

partnership. The name was changed in October 1869 to Twentsche Bankvereeniging

B.W. Blijdenstein & Co. (TBV). In the early decades, TBV concentrated on the rapidly

expanding cotton industry in the Twente region and on financing textile exports to the

Dutch East Indies. Slowly but surely, the bank spread its wings. Wissel- en Effectenbank

was established in Rotterdam in 1879, followed by Stichtse Bank in Utrecht in 1884 and

Bank voor Effecten- en Wisselzaken in the Hague in 1893. In the 1890s, TBV also set up

subsidiaries in neighbouring Westphalia (Germany), which was undergoing much the

same pattern of economic development as the Twente region. TBV ran a foreign

exchange office from 1875 to 1884 in Paris, after the takeover of a British bank. In 1909

it reacquired an interest in this bank that in the meantime had been renamed Banque

Jordaan. Like other large banks, TBV obtained interests in several provincial banks at the

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Benjamin WillemBlijdenstein Jr., c.


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start of the 20th century. They included Bergsma & Dikkers of Hengelo (1906),

Lissesche Bankvereeniging of Lisse (1907) and D.A. Wisselink of Alkmaar (1911).

Set for growth, 1917-1945

Despite initial opposition from B.W.

Blijdenstein and W.B. Blijdenstein, son

and grandson of the founder, TBV became

a limited liability company as of 1 January

1917 and was renamed Twentsche Bank

(TB). The financial limitations of a

partnership had become too much of a

handicap for TB now that it had developed from a family-run business to a full merchant

bank. At the same time, the subsidiaries Wissel- en Effectenbank and Bank voor

Effecten- en Wisselzaken were changed to TB branches. The same happened one year

later to Stichtse Bank in Utrecht.

After this period of expansion, the bank consolidated its growth. Towards the end of

1925, subsidiaries in the Twente region such as B.W. Blijdenstein Jr. of Enschede and

Ledeboer & Co. of Almelo - which had existed as separate legal entities - were wound up

and turned into TB branches. At the end of December 1930, the various institutions in

which TB had acquired an interest since 1907 lost their independence. As of 1 January

1931, the branches of these local banks such as Provinciale Bank voor Limburg,

Lissesche Bankvereeniging, Geldersch-Overijsselsche Bankvereeniging, Groninger Bank,

Bank van Wisselink and Haarlemsche Bankvereeniging, were turned into TB branches.

Continued growth, 1945-1964

The concentration of banking in the Netherlands

resumed after the Second World War. TB's first

major post-war takeover was Van Ranzow's Bank in

10Head office, Spuistraat,

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Arnhem in 1950, followed in 1952 by Van Mierlo en Zoon in Breda. The latter, however,

continued to trade

under its own name.

TB had always been at the forefront of innovations in Dutch banking. In the late 1950s,

for example, it introduced personal loans in the Netherlands and in 1953 it took over

Industrieele Disconto Maatschappij (est. 1923), which specialised in consumer credit. On

3 October 1964, Twentsche Bank merged with Nederlandsche Handel-Maatschappij to

form Algemene Bank Nederland (ABN Bank).

Rotterdamsche Bank, til-1964

Back to business, 1928-1964

In response to a growing number of female clients,

Robaver established Vrouwenbank (a bank especially

for women) in Amsterdam in 1928. Times changed,

however, and the bank was closed down in 1971 when

it no longer met a demand.

In July 1939, RB and Amsterdamsche Bank (AB) had almost completed plans for a

merger, but these were shelved when the Netherlands appeared likely to become

embroiled in the Second World War.

The bank re-adopted its old name of Rotterdamsche Bank in 1947 and took over

Nationale Handelsbank in 1960.

The old contacts between RB and AB were revived with success in 1964 when the twobanks merged into Amsterdam-Rotterdam Bank (Amro Bank), with its registered office

in Amsterdam.

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Amsterdamsche Bank, 1871-1964

An (over)ambitious start, 1871-1910

Amsterdamsche Bank (AB) was established in

Amsterdam on 5 December, 1871 by a group

of mainly German banks led by Bank fr

Handel und Industrie of Darmstadt. Germany

wanted to invest abroad some of the enormous

financial muscle it had obtained through

French reparations after the Franco-Prussian

war of 1870/1871. AB's founders sought to create a Dutch bank that would be

instrumental in bonding the Dutch and German money markets. AB maintained close ties

with the Amsterdam diamond trade. Other strong points were stockbroking and new

issues. Later the bank's international operations also developed into a major activity.

The early years were far from easy for the bank because its initial capital was too large

for the prevailing needs of Dutch trade and industry. Moreover, the bank had to weather

the great depression of 1873. International price levels remained low for a prolonged

period before bottoming out around 1885. The bank was also dogged by the blind faith of

many Dutch investors in American railroad shares, a prized possession among the

speculators of the day. It turned out that many railroads in the 1881-1884 period were less

solid than had been thought and their shares became virtually worthless. The bank's

ambitions suffered a further blow with the 1884 Java sugar crisis which caused great

market unrest.

Standard Federal Bank NA, 1893-present

Early years, 1893-1929

Standard Savings & Loan Association in Detroit was established on 25 April 1893, taking

over the charter of the Workman's Savings and Loan Association. Offices opened in the

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basement of the old McGraw Building at the

corner of Griswold and Lafayette in

downtown Detroit. Standard moved to a larger

building at the corner of Griswold and Larned

Streets in 1914. Land was purchased in 1927

and Standard then constructed its own

headquarters at the north-west corner of

Griswold and Jefferson in 1927. This lot was

known as "the Cornerstone of Detroit", as it was the site of the first building ever raised

in Detroit: Ste. Anne's Church, built in 1701. In that year assets surpassed USD 10

million.

Safe savings and name changes, 1929-1970

"Safety For Savings Since 1893"... an old Standard slogan that was never tested so

severely as during the Crash of 1929 and subsequent Great Depression of the 1930s. This

helped preclude a serious "run" on Standard's offices. Standard never closed its doors,

surviving with strength through 1929 and through the terrible bank closings of 1933,

when many banks that closed never opened again.

The first branch office was opened in 1948 on Grand River near Southfield Road in

Northwest Detroit.

Standard's name changes over the years reflect a growth in its scope and capabilities.

After 57 years as Standard Savings & Loan Association, the thrift applied for and

received a Federal charter in 1950. This expanded its lending powers and Standard

became known as Standard Federal Savings & Loan Association. The first branch office

outside Detroit city limits was opened in 1957 in suburban Royal Oak on North

Woodward near 12 Mile Road. Assets meanwhile amounted to USD 100 million in 1957.

Conversions and expansion, 1970-1987

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Board of Standard Savings & LoanAssociation, Detroit in 1924.


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In 1970, Birmingham Federal Savings (Michigan)

merged with Standard Federal. Main offices were

moved to Birmingham on Woodward Avenue near

16 Mile Road. Total assets in 1973 reached USD 1

billion. Also in 1973 Main offices were moved to a

larger building in Troy at 2401 Big Beaver Road.

Wayne Federal Savings (Michigan) was acquired in 1975 and in 1980

First Federal Savings of Niles (Michigan) merged with Standard

Federal. In 1981 Landmark Savings and Loan (Saginaw/Bay City, Michigan) and First

Savings Association of Dowagiac (Michigan) were taken over.

In the largest merger in Standard Federal's history: American Federal Savings of Fort

Wayne, First Federal Savings of Fort Wayne, Fort Wayne Federal Savings, and South

Bend Federal Savings and Loan Association (all of Indiana) were taken over in

November 1983. Assets reached USD 5 billion in 1984.

On 1 January 1985, the bank converted from a federally

chartered mutual savings and loan association to a federally

chartered mutual savings bank and changed its name from

Standard Federal Savings and Loan Association to Standard

Federal Bank. On 28 August 1986, the bank's Board of

Directors adopted a Plan of Conversion providing for the

bank's conversion from a mutual to a stock institution. As of

31 December 1986, Standard Federal had 83 offices in 16

counties in Michigan and Indiana; 78 of which were full-

service branches. The conversion from a mutual company to a publicly owned stock

company listed on the New York Stock Exchange took place on 28 January 1987. This

was one of the largest stock conversions by dollar amount in the history of the thrift

industry.

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ndard Federal's Board ofectors in 1988.


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Further acquisitions and a new parent company, 1988-1996

The acquisition of Tower Federal Savings Bank of South Bend (Indiana) was completed

on 18 June 1988. During 1989, the bank acquired two savings institutions in Michigan:

First Federal Savings and Loan Association of Kalamazoo (originally known as the

Kalamazoo County Building Loan Association) and Peoples Savings Bank, F.S.B. in

Monroe. On 6 September 1991, Standard Federal entered the Ohio market, gaining a

significant presence in the north-west Ohio area through the acquisition of United Home

Federal Savings and Loan Association of Toledo. First Federal Savings and Loan

Association of Lenawee County, Adrian (Michigan) was acquired with effect of 8 August

1992.

On 25 April 1993, Standard Federal celebrated its centenary. The bank stands as the

largest thrift institution in the Midwest and the 7th largest in the United States, with

assets of approximately USD 10 billion. In December of the same year, Standard

acquired Heritage Federal Savings Bank in Taylor (Michigan). This was the largest single

acquisition in Standard Federal's history. Other acquisitions by Standard Federal include

InterFirst Bankcorp (1993), Colonial Central Savings Bank (1994) and Fidelity Savings

Bank (1996). Effective 1 May 1995, Standard Federal Bank became a wholly owned

subsidiary of Standard Federal Bancorporation, Inc., a unitary thrift holding company.

On 21 November 1996, ABN AMRO reached an agreement to take over Standard

Federal Bancorporation Inc. The total price of USD 1.9 billion makes it the largest

acquisition ever made by ABN AMRO. The acquisition was completed on 1 May 1997.

In 1996, Standard Federal was the largest savings bank in the Midwest of the US, and the

fourth largest bank in the State of Michigan. At 31 December 1996, Standard Federal's

total assets amounted to USD 15.7 billion, with total deposits of USD 11.0 billion, loans

serviced for others of USD 10.5 billion and stockholders' equity of USD 956.8 million.

Michigan National Bank, 2001

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On 22 November 2000, ABN AMRO announced that it had

signed a definitive agreement with National Australia Bank Ltd

for the acquisition of Michigan National Corporation (MNC) for

USD 2.75 billion in cash. MNC is a commercial bank holding

company and since 1995, a wholly owned subsidiary of the

National Australia Bank. At the time, it had total assets

amounting to USD 11.6 billion. MNC's primary subsidiary is

Michigan National Bank with 3,600 employees, 184 branches

and 332 ATMs. On 2 April 2001, MNC was acquired by ABN

AMRO North America, Inc.

Michigan National Bank was established on 31 December 1940 as a consolidation of

First National Bank and Trust Company of Grand Rapids, First National Trust and

Savings Bank of Port Huron, National Bank of Lansing, Battle Creek's Security National

Bank, National Bank of Saginaw and First National Bank of Marshall. The 2001

acquisition created the second largest bank in Michigan as ranked by assets. Because of

the merger between Standard Federal Bank and Michigan National Bank the name of the

bank was changed to Standard Federal Bank NA with effect from 9 October 2001. The

new Standard Federal Bank operates approximately 300 branches and 850 ATMs in the

state of Michigan, more than any other financial institution. With effect from 12

September 2005 Standard Federal Bank changed its name to LaSalle Bank Midwest N.A.

Domestic expansion, 1945-1957

The bank arrived in So Paulo, Brazil's financial centre, in 1945, when it opened its first

branches in the capital of So Paulo state. At that time, Brazil was going through a

scenario of considerable political turmoil, which led to the removal of Getulio Vargas and

the end of the "Estado Novo" (New State), established by Vargas in 1937.

In 1948, the bank came to the north-east of Brazil, opening branches in the cities of

Recife, Pernambuco state and Salvador in Bahia. At the same time, Banco da Lavoura set

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Howard Stoddard wasfounder of MichiganNational Bank in 1940.


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up business in Amap, thus helping with the integration of the then federal territory

through the provision of credit for a company created to extract manganese, the mineral

wealth of that region.

In the same year, Dr. Aloyisio de Andrade Faria succeeded his father, who had passed

away in October 1948 at the age of 57. Aloyisio Faria managed the bank by closely

following his father's project and policies. Only 28 years at the time, he accomplished the

goal of transforming Banco da Lavoura into a financial institution present all over Brazil.

From 1948 until 1955 Banco da Lavoura de Minas Gerais expanded its network of

branches in So Paulo state and in the north-east of the

country. It installed a branch in Porto Alegre, Rio

Grande do Sul and acquired Banco do Norte do Brasil

S.A., Alagoas, adding a network of 180 branches to the

organisation. At that time, Banco da Lavoura became

the largest private bank in Brazil.

Foreign expansion, 1957-1998

With its position in Brazil consolidated, the bank

began its operations abroad. In 1957, it was the first

Brazilian bank to open a representative office - which

was to become a full agency in 1964 - in New York.

Also in 1957, it was the first bank to set up business in

Brasilia, even before the inauguration of the future

federal capital, thus receiving the "operating license

No. 1". During the period from 1958 to 1966, Banco da Lavoura purchased Banco Vera

Cruz, with a total of 346 branches, and created Banco Real de

Investimentos S.A.

The year 1969 was marked by important events, such as the creation of two additional

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financial businesses: Companhia Real de Investimentos (The Real Investment Company)

and Companhia Real de Crdito Imobilirio (The Real Property Loans Company), in

addition to the purchase of Banco Mercantil de Niteri.

On 1 March 1971 head office was moved from Belo Horizonte to So Paulo and the bank

assumed its current name Banco Real S.A. In 1973 took off an accelerated expansion of

the operations abroad, with the creation of Grupo Real del Paraguay (The Real Group of

Paraguay), comprised of a commercial bank and three other businesses. In the following

year, Banco Real opened a branch on the Brazilian island of Fernando de Noronha and

acquired Banco de Minas Gerais, which operated 133 branches at that time.

On its 50th anniversary, in 1975, Banco Real operated 512 branches in Brazil, the biggest

branch network in the country, in addition to 12 associated businesses including

Companhia Real de Investimentos, then the number one in the domestic ranking. It also

had 10 units located abroad - in Bogota, Panama, Grand Cayman, Nassau, Curaao, Los

Angeles, New York, Toronto, and Mexico City.

Merger with Banco ABN AMRO, 1998-present

In mid-1998, the strategic partnership between Banco Real and Banco ABN AMRO SA -

the Brazilian subsidiary of ABN AMRO Bank - was announced. ABN AMRO began its

activities in Brazil in 1917 as Banco Holands da America do Sul, when it opened two

pioneering branches in the country: one in Santos, So Paulo state and another in Rio de

Janeiro. Growth came with the opening of new branches and the acquisition of Aymor

in 1963. The merger with Banco Real took place in 1998 and was one of the largest

financial operations at the time.

In November 1998 and November 2001 two Brazilian state-owned banks, Banco do

Estado de Pernambuco S.A. (Bandepe) in Recife and Banco do Estado do Paraiba

(Paraiban) were acquired. In October 2003, Banco Real completed the acquisition of

Banco Sudameris

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LaSalle Bank, 1927-present

Birth of a bank, 1927-1940

The bank was originally chartered on 29 November 1927 as National Builders Bank of

Chicago and located at LaSalle Street and Wacker Drive. The chief purpose of LaSalle's

founders was to place a bank in the heart of Chicago's financial district that, in addition to

serving business and industry, would also provide much needed banking services to the

many thousands of individuals working in Chicago. A subsidiary company, LaSalle

National Safe Deposit Corporation was incorporated on 24 February 1934 to provide safe

deposit box facilities to customers of the bank.

In 1940 a group of businessmen, including Laurence H. Armour Sr., Marshall Field III,

John R. Nicholson and John Nuveen, secured controlling interest in the National Builders

Bank. At that time the bank's name was changed to LaSalle National Bank. On 12

November 1940 the bank officially opened its new facility with a staff of 42 and total

assets of USD 7.5 million in the Field Building at 135 South LaSalle Street, a 43 storey

landmark building in Art Deco architectural style, built between 1931 and 1934. On 1

May 1969 the building was renamed LaSalle Bank Building.

Exchange National Bank, 1989

Definitive agreement for yet another merger was reached in September 1989, when

ABN/LaSalle agreed to acquire Exchange Bancorp, Inc. The merger was completed on

30 January 1990 for a payment of USD 412 million in cash by LaSalle National

Corporation. Exchange National Bank was incorporated in Chicago on 10 July 1926 as

Halsted Exchange National Bank of Chicago. In March 1933 Halsted was one of only

two Chicago banks to reopen its doors on the first day after Roosevelt's bank moratorium

was lifted. The name changed into Exchange National Bank of Chicago with effect from

24 April 1946. Since then the bank focused on providing banking services for Chicago

small- and medium-sized businesses. On 23 August 1982 Exchange National Bank

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absorbed Central National Bank in what was then the largest Illinois bank merger in 25

years. Central National Bank opened the first drive-in bank in the US as early as 1946.

This is the predecessor of the bank's current full service drive-in bank in the centre of

Chicago, which is designed specifically to handle the banking needs of businesses and

commercial firms. This merger made LaSalle the second largest bank in Illinois for

middle-market companies. In fact the bank's market share in this segment was doubled

from 6% to 12%

Acquisitions 1991-2000

On 16 July 1991, LaSalle National Corp acquired Talman Home Federal Savings and

Loan Association of Illinois in Chicago for USD 400 million. Talman was the largest

savings bank in Illinois and the 30th in the US with a balance sheet total of USD 5,9

billion, 45 offices and a staff of 2,015. This acquisition was approved on 28 February

1992 by the Federal Reserve Bank in Washington. Talman operated principally as a

commercial bank, directing itself at the middle market corporate clients. In addition

LaSalle had a private banking (trust) department and operated 19 branches in the

consumer retail sector. The acquisition of Talman signifcantly expanded the retail

activities of the bank and thus ensured a broad basis for inexpensive funds to be applied

on the corporate side. The name of Talman was changed to LaSalle Talman Bank FSB.

On 25 May 1994, ABN AMRO North America received permission from the US

authorities for the take-over of Cragin Federal Bank for Savings in Chicago for USD 530

million. Cragin, with 27 branches and assets of USD 2.8 billion was integrated under the

name LaSalle Cragin Bank FSB. In July 1994, LaSalle Talman Bank FSB reached

agreement with Savings of America about the acquisition of 26 of its Chicago branches

by LaSalle Talman Bank. The bank was integrated in the organisation of LaSalle Talman

Bank FSB. On 11 November 1995, LaSalle Cragin Bank FSB and LaSalle Talman Bank

FSB merged to form LaSalle Bank FSB.

A following acquisition was with effect from 1 August 1996 when ABN AMRO North

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America acquired Comerica Inc.'s Illinois banking unit. Comerica has 25 Chicago-area

branches and 38 automatic teller machines. Comerica Bank-Illinois's name was changed

into LaSalle Bank Illinois. The next acquisition was a few months later when CNBC

Bancorp, parent of Columbia National Bank of Chicago, became part of the LaSalle

banking group.

With effect from 30 April 1999 LaSalle Bank NA (old charter, composed of LaSalle

Bank Illinois, LaSalle Bank Northwest, Columbia National Bank and LaSalle Bank)

merged into LaSalle National Bank. LaSalle National Bank changed name to LaSalle

Bank NA (under new charter). With effect from 31 March 2000, LaSalle Bank FSB

merged into LaSalle Bank NA.

On 3 May 2000 LaSalle Bank announced that it acquired the land trust accounts of

American National Bank and Trust Company. The deal made LaSalle Bank the largest

land trustee in Illinois with 49,000 accounts and marked the

end of American National Bank's land trust activities.

Merger motives, 1964

On 16 July 1991, LaSalle National Corp acquired Talman

Home Federal Savings and Loan Association of Illinois in

Chicago for USD 400 million. Talman was the largest

savings bank in Illinois and Nederlandsche Handel-

Maatschappij (Netherlands Trading Society/NTS) and

Twentsche Bank (TB) announced their intention to merge

on 4 June 1964. The merger was finalised on 3 October 1964 and the new organisation

began trading under the name of Algemene Bank Nederland (ABN Bank) of Amsterdam.

An important reason for the merger was the international trend towards concentration.

Banks were obliged to scale up their operations. The extensive international network of

NTS and the strong Dutch home base of TB - notably in stockbroking and foreign

exchange dealing - complemented each other perfectly. Another reason for joining forces

21

As part of a new corporateidentity ABN Bankintroduced in 1974-1975as its new logo, a simplelogotype, an abbreviationof its official name(Algemene BankNederland), in either the


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was the past involvement of the two banks in developing the textile industry in the

Twente region of the Netherlands. NTS had been sharing the running expenses of TB's

branch in London (which opened in 1858) since 1953.

ABN AMRO, 1991-present

Combined forces, 1991

The two largest commercial banks in the Netherlands, Algemene Bank Nederland (ABN

Bank) and Amsterdam-Rotterdam Bank (Amro Bank) announced a merger feasibility

study in March 1990. The study soon yielded positive results and ABN AMRO Holding

was established on 30 May 1990. The legal merger between ABN Bank and Amro Bank

took place on 22 September 1991.

The reasons for the merger lay in the need to combine forces in order to expand and

reinforce the prominent positions that the two banks occupied in their own right. The

worldwide scaling up of companies and financial institutions called for a bank with a

strong capital base and broad expertise.

In time, ABN AMRO focused on four home markets: the Netherlands, the US Midwest,

Italy and Brazil.

Acquisitions and divestments in The Netherlands, 1992-present

In the Netherlands ABN AMRO acquired LeasePlan in 1992 from subsidiary Bank Mees

& Hope. The two subsidiaries Bank Mees & Hope and Pierson, Heldring & Pierson were

merged in 1993, to form MeesPierson. This subsidiary was sold to Fortis in 1997.

Bouwfonds Nederlandse Gemeenten, a commercial and private property developer, was

acquired in 2000. A joint venture in bancassurance between ABN AMRO and Delta

Lloyd was launched in 2003.

By 2006, a number of non-core or non-sustainable activities had been sold: LeasePlan

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Corporation in 2004, and private bank Nachenius, Tjeenk & Co. in 2005. In December

2006 ABN AMRO announced that the process of divesting Bouwfonds will start in the

first quarter of 2006.

US Midwest, 1992-present

ABN AMRO has pushed ahead with international expansion since its merger. In July

1991, subsidiary LaSalle National Corporation of Chicago took over another Chicago

bank, Talman Home Federal Savings & Loan Association. In July 1993, ABN AMRO

announced the acquisition of Cragin Federal Bank for Savings in Illinois, US.

A significant acquisition was the 1996 take-over of Michigan-based Standard Federal

Bancorporation. Founded in 1893, Standard Federal had grown from a small mutual

savings association into one of the Midwest's leading financial services companies. In

one fell swoop, ABN AMRO had become a leading player in the US Midwest banking

sector, with a major share of the region's lucrative mortgage-lending business. This was

one of the reasons for the quotation of American Depositary Receipts ABN AMRO

Holding N.V. on the New York Stock Exchange in May 1997.

The position in the Midwest was consolidated even further with the 2001 take-over of

Michigan National Corporation (MNC). The merger of MNC with Standard Federal

created the second-largest bank in Michigan. New York based European American Bank

was sold to Citibank in 2001.

Brazil, 1998-present

In November 1998, the acquisition of Brazilian bank Banco Real was completed.

Founded in 1925 as a small co-operative bank, Banco Real had grown into the fourth-

largest privately owned bank in Brazil, with operations in several other Latin American

countries. ABN AMRO had been active in Brazil since 1917 as Banco Holands da

America do Sul, but the acquisition of Banco Real and the small state-owned banks

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Bandepe and Paraiban firmly established Brazil as ABN AMRO's third home market.

In 2003, when many foreign players were cutting back on their investment or even

withdrawing from Brazil, ABN AMRO Banco Real surprised the markets by announcing

the acquisition of Brazilian bank Sudameris. The move reinforced ABN AMRO's

position as fourth-largest bank in Brazil and provided it with a firm foothold in the

economically vibrant south-east of the country.

Global clients, 1992-present

The London stockbroking firm of Hoare Govett was taken over by ABN AMRO in June

1992. In 1994, this was followed by the purchase of a stake in Hoare Govett Asia, which

was increased to a majority stake a year later. In 1995 the Scandinavian investment bank

Alfred Berg was also acquired. Founded as a stockbroking firm in 1863 - the same year

the Stockholm stock exchange opened its doors - the Swedish firm was taken over by

banker Alfred Berg in 1901. The company now provides wholesale banking and asset

management operations in four Nordic countries. The name of Alfred Berg SE was re-

branded in ABN AMRO in June 2006.

The growing network of investment banks paved the way in 1996 for the joint venture

with prestigious merchant bank N.M. Rothschild & Sons, London. The move allowed

ABN AMRO to profit from Rothschild's strong position in international privatisations

and boosted ABN AMRO's share of the stock issue market.

International developments, 1998-present

In the area of custodial and administrative services for securities, ABN AMRO started a

co-operative arrangement in November 1998 with Mellon Bank Corporation in

Pittsburgh, Pennsylvania.

ABN AMRO's presence in Germany was strengthened in 2002 through the acquisition of

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German private bank Delbrck & Co. Delbrck & Co is one of the oldest and most

prestigious private banks in Germany with a history dating back almost 300 years. This

was followed in 2003 by the acquisition of BethmannMaffei of Frankfurt (est. 1748). The

merged entity was re-branded as Delbrck BethmannMaffei.

In 2000, the bank introduced a new organisational structure, restructuring the bank into

three largely autonomous Strategic Business Units (SBUs). As of 1 January 2006, this

structure was replaced by a system of two global and five regional Client Business Units,

and three global Product Business Units.

After a long and much publicized struggle for control of Banca Antonveneta - a banking

group with a strong presence in Italy's wealthy north-eastern region - ABN AMRO

managed to take a majority stake early 2006.

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2. HISTORY OF ROYAL BANK OF SCOTLAND

On 31 May 1727 The Royal Bank of Scotland was granted a royal charter under the great

seal of Scotland with authority to exercise the rights and powers of banking. The Earl of

Ilay, one of the most powerful men in Scotland, was its first governor. In December 1727

the new bank opened for business in Ship Close, Edinburgh. The Royal Bank soon

showed its willingness to innovate by introducing the cash credit or overdraught in

1728 - whereby a borrower could draw out more than was in his account but be charged

interest only on the sum borrowed. Soon afterwards the bank also began to accept

deposits at interest, although note issue was to remain the focus of its lending and profits

for several decades.

In the years that followed, the Royal Bank developed connections with the growing

number of provincial banking companies, thereby pioneering correspondent banking in

Scotland. In 1783, it opened its first branchoffice, in the fast-growing city of Glasgow.

The branch was a great success, and was soon generating a significant proportion of the

banks profits.

In 1821 the bank moved from the congested Old Town to St Andrew Square in the New

Town of Edinburgh, occupying from 1828 the magnificent Georgian town house which

remains the banks registered office today. The bank continued to expand during the

nineteenth century, opening branches in Dundee, Rothesay, Dalkeith, Greenock, Port

Glasgow and Leith during the 1830s, acquiring various agencies of Western Bank after

its collapse in 1857 and purchasing Dundee Banking Co (est 1763) in 1864. In 1874 the

Royal Bank opened a branch in London. By 1910 the bank boasted 158 branches and

around 900 staff.

The outbreak of the First World War heralded a period of rapid change in the banking

industry. Many bank clerks of military age enlisted and the gaps were filled by the

recruitment of female staff on an unprecedented scale. Overall the volume of banking

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business grew, prompting a series of major amalgamations after 1918, including moves to

affiliate certain Scottish and English banks. The Royal Bank embarked upon a policy of

expansion south of the border, acquiring Drummonds Bank in 1924 and

Williams Deacons Bank, with its large network of branches in the northwest of England,

in 1930. In 1939, with war imminent, the Royal Bank negotiated the purchase of Glyn,

Mills & Co, owners of the oldestablished banks of Child & Co and Holt & Co. Both

Glyn, Mills and Williams Deacons continued in business as separate entities and

together with the Royal Bank became known as The Three Banks Group.

During the Second World War the bank experienced similar problems to those of 1914 to

1918, with controls over foreign exchange and lending priorities as well as shortages of

staff. Poster advertising the Royal Banks foreign exchange services, 1930s After the war

the banks expansion continued, with the opening of new branches and the launch of such

services as personal loans and cash dispensers. In 1969 The Royal Bank of Scotland

amalgamated with National Commercial Bank of

Scotland - itself the product of a merger ten years earlier, between National Bank of

Scotland and Commercial Bank of Scotland.

The new bank, with 693 branches, enjoyed over 40% of Scotlands banking business. In

1970 its three London clearing banks - Glyn, Mills, Williams Deacons Bank and The

National Bank - combined to form Williams & Glyns Bank. During the 1970s, The

Royal Bank of Scotland flourished, playing a leading role in lending to businesses that

served the North Sea oil and gas industry and launching its own leasing and finance

companies. In 1972 it was the first British clearing bank to provide house purchase loans

and in 1977 new automatic tellers, known as Cashline machines, replaced the earlier

fixedamount machines. In England and Wales Williams & Glyns was similarly

successful and innovative, introducing the Masterguard insurance scheme and free

banking for personal customers in credit. In 1985 the Royal Bank merged the businesses

of Williams & Glyns Bank and The Royal Bank of Scotland, to become Britains first

truly nationwide high street bank.

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Also in 1985, The Royal Bank of Scotland launched the innovative new

insurance provider Direct Line. Three years later, the Group acquired Citizens Financial

Group of Providence, Rhode Island. In the early 1990s the Royal Bank refocussed on its

core business of retail banking. It acquired the Edinburgh-based private bank of Adam &

Company in 1992 and launched Direct Banking in 1994. Two years later it established a

pioneering independent offshore bank, Royal Bank of Scotland International, and in 1997

announced the UKs first fully-fledged on-line banking service. It also launched joint

financial services ventures with both the retailing giant Tesco and Virgin Direct.

In 2000 The Royal Bank of Scotland Group acquired National Westminster Bank plc.

Since the merger both retail banks have continued to operate as separate brands on the

High Street. The Royal Bank of Scotland today operates a network of 650 branches and

1,700 ATMs across Britain. It provides 24-hour telephone banking, and its online

banking facilities offer almost every financial product, from mortgages to stakeholder

pensions. The bank has come a long way since 1727, and today serves around three and a

half million personal and small business customers.

The Royal Bank of Scotland Group is one of the world's leading

financial services providers, and one of the oldest banks in the

UK.

Following the takeover of National Westminster Bank in 2000,

the Group's global business has continued to grow. In addition to

a strong UK presence, the bank has offices in Europe, the USA

and Asia. By the end of 2002, this was the second largest bank in

Europe and the fifth largest in the world by market capitalisation.

In the UK, the RBS branch network covers the nation and boasts a pedigree of great

variety and distinction. Its history is very much the history of banking in the British Isles

for the past four centuries - we can trace its roots back to the 16th Century through the

amalgamation of more than 200 private and joint-stock banks.

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The Royal Bank of Scotland was founded in Edinburgh by Royal Charter in 1727 and for

several decades traded solely from their head office in the city's Old Town. However, in

1783, then opened their first branch office in Glasgow and went on to develop a large

network of offices throughout Scotland during the 19th Century.

In 1874, The Royal Bank of Scotland opened a branch office in London and from the

1920s developed, by acquisition, a major presence in England. Banks which joined the

Group during these years included Drummonds (established c.1712), Williams Deacon's

Bank (established 1836), Glyn, Mills & Co (established 1753) and Child & Co

(established c.1580), with business in London, north-west England and overseas.

By 1970, following The Royal Bank of Scotland's merger with the Edinburgh-based

National Commercial Bank of Scotland (comprising the former National Bank of

Scotland, established 1825) and the Commercial Bank of Scotland (established 1810),

they accounted for more than 40 per cent of Scotland's banking business.

Under the Williams & Glyn's Bank banner, RBS also had a large and growing presence

in England and Wales. In 1985, Williams & Glyn's merged fully with the Group's

Scottish clearing bank which, thereafter, traded throughout Britain as a single entity - The

Royal Bank of Scotland.

During the 1980s, the Group diversified. They set up the innovative car insurance

company Direct Line in 1985 and acquired Citizens Financial Group (established 1828)

of Rhode Island in the USA in 1988. Both were to prove highly successful ventures.

During the early 1990s, the bank refocused on its core business of retail banking,

acquiring the private bank of Adam & Company (established 1983) in 1992. They

launched Direct Banking in 1994 and it quickly became Britain's fastest growing 24-hour

telephone banking operation. Then, in 1997, announced the UK's first on-line banking

service, as well as embarking on joint financial services ventures with Tesco and Virgin

Direct.

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In 2000, in the biggest takeover in the history of British banking, the Royal Bank

acquired National Westminster Bank plc to create a huge group with a highly diversified

portfolio of services for personal, business and corporate customers.

National Westminster Bank had been formed in 1968, when National Provincial Bank

(established 1833), along with its subsidiary District Bank (established 1829), and

Westminster Bank (established 1836), agreed to merge. This combined bank, which

began trading in 1970, could also trace its history back down the centuries through its

own lineage of prestigious constituent banks.

From the late 1970s, National Westminster Bank had grown rapidly, extending its

activities beyond domestic retail banking by developing overseas and merchant banking

interests. In 1995, the bank was restyled NatWest Group to reflect the positioning of the

company as a portfolio of businesses.

After the merger of the Royal Bank and NatWest, the businesses of the two groups were

combined, and the enormous task of integrating our IT systems began. Scheduled to be

completed in 2003, it was the largest project of its kind ever attempted, and was actually

finished in November 2002 - four months ahead of target.

NatWest's retail bank continues to operate as a distinct and separate brand on the high

street.

Foundation

The bank traces its origin to the Equivalent Society which was set up by investors in the

failed Company of Scotland to protect the compensation they received as part of the

arrangements of the 1707 Acts of Union. TheEquivalent Society became theEquivalent

Company in 1724, and the new company wished to move into banking. The British

government received the request favourably as the "Old Bank", the Bank of Scotland,

was suspected of having Jacobite sympathies. Accordingly the "New Bank" was

chartered in 1727 as the Royal Bank of Scotland, with Archibald Campbell, Lord Ilay

appointed as its first governor.

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In 1728, the Royal Bank of Scotland became the first bank in the world to offer an

overdraft facility.

Competition with the Bank of Scotland

Competition between the Old and New Banks was fierce, and

centred on the issue of banknotes. The policy of the Royal Bank

was to either drive the Bank of Scotland out of business or to take

it over on favourable terms.

The Royal Bank built up large holdings of the Bank of Scotland's

notes, which it acquired in exchange for its own notes, and then

suddenly presented them to the Bank of Scotland for payment. To

pay for these notes the Bank of Scotland was forced to call in its loans and, in March

1728, to suspend payments. The suspension relieved the immediate pressure on the Bank

of Scotland at the cost of substantial damage to its reputation, and gave the Royal Bank a

clear space to expand its own business, although the Royal Bank's increased note issue

also made it more vulnerable to the same tactics.

Despite talk of a merger with the Bank of Scotland, the Royal Bank did not possess the

wherewithal to complete the deal. By September 1728 the Bank of Scotland was able to

start redeeming its notes again, with interest, and in March 1729 it restarted lending. To

prevent similar attacks in the future, the Bank of Scotland put an "option clause" on its

notes, giving it the right to make the notes interest-bearing while delaying payment for

six months; the Royal Bank followed suit. Both banks eventually decided that the policy

they had followed was mutually self-destructive and a truce was arranged, but it still took

until 1751 before the two banks agreed to accept each other's notes.

Scottish Expansion

The bank opened its first branch office outside Edinburgh in 1783 when the first Glasgow

branch opened. Further branches were opened in Dundee, Rothesay, Dalkeith, Greenock,

Port Glasgow and Leith during the early 1800s. In 1821, the bank moved from its original

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head office in Edinburgh's Old Town to St Andrew Square in the New Town which

remains the bank's registered head office to this day.

The rest of the 19th century saw the bank pursue mergers with other Scottish banks,

mainly in a response to failing institutions. The assets and liabilities of the Western Bank

were acquired following its collapse in 1857 and in 1864 the Dundee Banking Co. was

acquired. By 1910, the bank had 158 branches and around 900 staff.

In 1969, the bank merged with the National Commercial Bank of Scotland to become the

largest clearing bank in Scotland.

Expansion into England

The expansion of the British Empire in the latter half of the 19th century saw the

emergence ofLondon as the world's largest financial centre, attracting the Scottish banks

to expand south into England. The first London branch of the Royal Bank of Scotland

opened in 1874. However, the English banks moved to prevent further expansion by the

Scottish banks in England, and after a government committee was set up to examine the

matter, the Scottish banks decided to drop their expansion plans. An agreement was

reached whereby English banks would not open branches in Scotland; and Scottish banks

would not open branches in England outside of London. This agreement remained in

place until the 1960s, although various cross border acquisitions were permitted. [1]

The Royal Bank's English expansion plans were resurrected afterWorld War I, when it

acquired various small English banks, including London based Drummonds Bank in

1924; and William Deacon's Bank based in North West England in 1930; and Glyn, Mills

and Co in 1939. The latter two were merged in 1970 to form Williams and Glyn's Bank;

and later rebranded as the Royal Bank of Scotland in 1985

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III. MANAGEMENT

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1. MANAGEMENT OF ABN-AMRO

ABN AMRO believes that the concept of sustainable development is based on creating

long-term value for their shareholders, clients, employees and suppliers; contributing to

society and the environment; and being engaged with what they stand for.

ABN AMRO has Corporate Values which provides the foundation for the bank's

Business Principles. The bank formulated these Corporate Values in 1997. These values

and principles help the management to sustainable development by which they can meet

the needs of their organisation, thus protecting, sustaining and enhancing human, natural

and financial capital for the future. These four corporate values are:

Integrity: Above all, we are committed to integrity in all that we do, always,

everywhere.

Teamwork: It is the essence of our ability to succeed as a trusted preferred

supplier of financial solutions to our clients. Our overriding loyalty is to the good

of the whole organization. We learn from each other and share our skills and

resources across organizational boundaries for our clients' benefit and our own.

Respect: We respect every individual. We draw strength from equal opportunity

and diversity, at the same time supporting personal growth and development. We

value and we all benefit from the entrepreneurial spirit of each individual.

Professionalism: We are committed to the highest standards of professionalism,

we pursue innovation, we deploy imagination, we are open to new ideas and we

act decisively and consistently. We are determined to deliver outstanding quality

so that our relationships with our clients will be long lasting and close.

Based its corporate values, ABN AMRO has formulated Business Principles to guide all

its employees in their daily work. Defining them clarifies and unites them all as a group.

The Business Principles used by ABN AMRO management are:

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We are the heart of our organisation

We pursue excellence

We aim to maximize long-term shareholder value

We manage risk prudently and professionally

We strive to provide excellent service

We build our business on confidentiality

We assess business partners on their standards

We are a responsible institution and a good corporate citizen

We respect human rights and the environment

We are accountable for our actions and open about them

Business Principles alone are not the answer to every problem, but they do challenge themanagement to translate their spirit into daily practice and shift horizons beyond short-

term profit to long-term value creation through sustainable development.

Abn-Amros approach to sustainability concentrates on six focus areas:

Accountability

Protecting Its Assets

Financial Services Employer of Choice

Impact

Community Investment

Engaged, able, and qualified employees who feel fulfilled and energized, and who

embrace our business strategy and culture, help make the business successful. That's why

ABN AMRO needs to be an employer of choice with the ability to attract, enthuse and

retain the most talented staff.

This requires excellence in a number of aspects: an open and welcoming environment

offering equal opportunities; a safe, healthy and stimulating workplace; transparent

structure and goals; advancing the employability of its staff; and fair and competitive

compensation.

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Diversity and inclusion are a key driver in achieving business goals and high

performance. They are committed to having a diverse and inclusive workforce. They aim

to respect every individual and draw on their strengths and creativity. It's also important

that staff feel they are a part of the company, supported by management in their

development. Employee engagement is measured on a periodic basis and helps the bank

to identify where we can do better.

Learning also contributes to an increase in performance and motivation. ABN AMRO has

a global employee learning strategy that aims to develop staff at all levels in its

organization.

As ABN AMRO is a dynamic and growing business, there is a constant inflow and

outflow of people caused by people joining or leaving joiners, leavers, as well as

acquisitions, divestures and restructuring programs. It strives to communicate openly and

transparently with its employees, especially when planning organizational changes. They

work closely with employee representative bodies during times of change.

ABN AMRO has the greatest impact and influence to reduce its direct environmental

footprint in the following areas:

Global property portfolio management

IT equipment

Business travel

Wood and paper

Sustainable procurement

Waste and water operations

Stakeholder Engagement:

Many individuals affect or are affected by this

business. These are the stakeholders. They

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include shareholders, employees, clients, suppliers, society and the environment. ABN

AMRO committed to maintaining open and transparent communications with all its

stakeholders. To build and sustain public trust, it is no longer enough just to meet legal

requirements of disclosure and behaviour. Engaged consultation, moral compliance,

doing the right things in the right way are necessary in todays business environment.

To be a good corporate citizen, The bank understands developments in society and in its

stakeholders interests and opinions. They accept that opinions inevitably differ on

certain issues. But know that listening to, understanding, and addressing the aspirations

and concerns of different stakeholders strengthens our decision-making. This helps them

improve and to build reputation for openness and accountability. At the same time,

disclosure has its limits; client and employee confidentiality, and safeguarding their

respective rights and interests, are of equal importance as well as often simply being

required by law.

ABN AMRO participates actively in dialogue and joint initiatives with NGOs, local

communities, business partners aimed at raising industry standards, and establishing

sound business practices. This dialogue includes consulting NGOs on its policies, to

ensure that they take their views and expertise into account.

Shields and Colors:

Symbolism is the most primitive and penetrating form of language. Many symbols

guarantee recognition at a single glance. A shield stands for reliability, tradition, security,

and protection. This is of vital importance for all Abn-Amro clients, as they must be

absolutely sure that their money and business are in trusted hands.

The Abn-Amro shield symbolizes dynamism and power, communicating its scale and

potential for growth. The shield evokes an image of experience and professionalism. It is

also an international symbol, powerful in its simplicity. The straight lines of the design

provide us with a modern look, while still retaining traditional values.

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Color is also vital to communicating the message of the ABN AMRO shield. Green and

yellow have strong subconscious associations. Green symbolizes unchanging values and

stability. Yellow symbolizes optimism for the future. Used together, these colours

convey aspiration. Aspiration towards increased esteem in ones eyes and the eyes of

others, and an ambition that inspires recognition. This shield captures the essence of what

people want from their bank: trust, security and ambitious optimism for their future,

driven by strong unchanging values.

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2. MANAGEMENT OF ROYAL BANK OF SCOTLAND

The Royal Bank of Scotland Group, formerly ABN AMRO Bank

(Pakistan) Limited, has grown from small beginnings nearly 300

years ago to become one of the largest financial services groups

in the world. The management of ABN AMRO discussed above

has now merged with RBS management leading to a better expected output.

With an AA credit rating, RBS group has more than 40 million customers worldwide,

operating profit in 2007 10.3 billion, and total assets, as at 31 December 2007, of GBP

1,900.5 billion. Its brands operate around the globe and down its citizens street to

provide banking services for individuals, businesses and institutions. RBS is proud of its

history and remain committed to innovation and service in business and through our

many sponsorship activities. The Royal Bank of Scotland Group operates in more than

50 countries around the world to provide a range of retail and corporate banking,

consumer finance, insurance and wealth management services.

As well as having the largest branch network in the UK and providing market-leading

wealth management, consumer finance, insurance and corporate banking solutions to

millions of customers, the RBS Group has a growing presence across the rest of Europe.

The Royal Bank of Scotland Group, under Group Chief Executive Sir Fred Goodwin, is

made up of five main operating divisions, which are supported by a number of group

functions such as:

Global Markets

Johnny Cameron - Chairman, Global Markets

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RBS provides banking services and integrated financial solutions to major global

corporates and financial institutions, as well as offering a world-class capability in

international payments. Global Markets consists of our Global Banking &

Markets and Global Transaction Services businesses.

Regional Markets

Gordon Pell- Chairman, Regional Markets

The RBS Group operates in a number of distinct national and regional markets

around the world, including the UK, Europe, the Middle East, Asia and the

Americas, to offer personal, business and commercial customers a comprehensive

range of products and services.

RBS Insurance

Chris Sullivan - Chief Executive, RBS Insurance

RBS Insurance is the second largest general insurer in the UK, and the biggest

provider of motor insurance. It also has a growing presence in Spain, Italy and

Germany. Its well-known and award-winning brands sell and underwrite

insurance by phone and on-line, and through a network of brokers and

partnerships

ABN AMRO

Mark Fisher- Chairman of the Managing Board, ABN AMRO

The RBS Group formed a consortium with Fortis and Santander to acquire

international banking group ABN AMRO in October 2007. On completion of the

acquisition, we will retain ABN AMRO's global wholesale businesses and

international retail businesses in Asia, Eastern Europe and the Middle East.

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Group Manufacturing

Ron Teerlink- Chief Executive, Group Manufacturing

Manufacturing supports the customer-facing operations of the RBS Group's

multiple brands, as well as managing our property portfolio and taking

responsibility for most of our purchasing. It also develops and maintains the

infrastructure and technology that support our branches and cash machines,

internet and telephone banking services, mortgage processing and money

transmission.

RBS is now one of the top 10 banking groups in the US, and an established name across

North America. Citizens Bank has retail branches in 13 states, while RBS Global

Banking & Markets works with 80 per cent of the Fortune 100 companies. RBS is one of

the top five banks in the Asia Pacific region for corporate and institutional customers, and

retains a strategic partnership with Bank of China. It also provides wealth management

services across the region through RBS Coutts. RBS is one of the world's top 10

financial services groups and a leading provider of personal, business and institutional

banking services.

The Royal Bank of Scotland Limited has announced the launch of the evening banking

service in Pakistan in response to the needs of its customers, especially from the business

community. The evening banking service will be available for an additional two hours till

7 p.m, from Monday to Friday in 13 branches across 5 leading cities. This includes 6

branches in Karachi, 2 branches each in Lahore, Islamabad and Faisalabad and one

branch in Multan. This service will subsequently be expanded to other branches and cities

as well.

This new initiative from RBS offers a wide-ranging array of customer oriented services,

including local currency cash or cheque deposits and withdrawals, issuance of local

currency pay orders and demand drafts, free and instant funds transfer to any RBS

account, collection window for cheque book and ATM card and drop box facility.

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The management is also focused on providing other services such as:

Personal Finances

The Royal Bank of Scotland Group's Personal Banking businesses providecustomers in the UK and overseas with a comprehensive range of banking

services - from everyday accounts to mortgages, loans, investments and

insurance.

Wealth Management

RBS Wealth Management businesses provide private banking and investment

services to global clients through a number of UK and overseas private bankingsubsidiaries, and offshore banking businesses.

Business & Commercial

The Royal Bank of Scotland Group's Business & Commercial brands offer a

range of tailored products and services for small businesses, as well as providing a

network of branch-based business advisers.

Corporate & Institutional

Global Banking and Markets supports the requirements of large international

corporations and institutions, providing access to a full range of services in global

financial markets, while Corporate Banking focuses on building long-term

relationships with its corporate and commercial customers.

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3. CURRENT MANAGEMENT PEOPLE

Chairman

Sir Tom McKillop (age 65)

C, N, R

Appointed to the Board as Deputy-Chairman in September 2005, Sir Tom is a

non-executive director of BP plc and president of the Science Council. He was

formerly chief executive of AstraZeneca PLC, and was previously president of the

European Federation of Pharmaceutical Industries and Associations and chairman

of the British Pharma Group. He is a trustee of the Council for Industry and

Higher Education.

Executive Directors

Group Chief Executive

Sir Fred Goodwin (age 49)

DUniv, FCIBS, FCIB, FIB, LLD

C

Appointed to the Board in August 1998, Sir Fred is a Chartered Accountant. He

was formerly chief executive and director of Clydesdale Bank PLC and Yorkshire

Bank PLC. He is chairman of The Prince's Trust, a non-executive director of

Bank of China Limited and a former president of the Chartered Institute of

Bankers in Scotland.

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Chairman, Regional Markets

Gordon Pell (age 58)

FCIBS, FCIB

Appointed to the Board in March 2000, Gordon Pell was formerly group director

of Lloyds TSB UK Retail Banking before joining National Westminster Bank Plc

as a director in February 2000 and then becoming Chief Executive, Retail

Banking. He is also a director of Race for Opportunity, and a member of the FSA

Practitioner Panel. He was appointed chairman of the Business Commission on

Racial Equality in the Workplace in July 2006 and deputy Chairman of the Board

of the British Bankers Association in September 2007.

Group Finance Director

Guy Whittaker (age 51)

C

Appointed to the Board in February 2006, Guy Whittaker joined RBS after

spending 25 years with Citigroup. He was formerly the Group treasurer based inNew York and prior to that had held a number of management positions within

the financial markets business based in London.

Chairman, Global Markets

Johnny Cameron (age 53)

FCIBS

Appointed to the Board in March 2006, Johnny Cameron joined RBS from

Dresdner Kleinwort Benson in 1998. In 2000, he was appointed Deputy Chief

Executive of Corporate Banking and Financial Markets (CBFM) with

responsibility for the integration of the NatWest and RBS Corporate Banking

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businesses. In October 2001, he was appointed Chief Executive CBFM

subsequently renamed Corporate Markets in January 2006.

Chairman, Managing Board, ABN AMRO

Mark Fisher (age 48)

FCIBS

Appointed to the Board in March 2006, Mark Fisher is a career banker having

joined National Westminster Bank Plc in 1981. In 2000, he was appointed ChiefExecutive, Manufacturing with various responsibilities including the integration

of RBS and NatWest systems platforms. Mark is Chief Executive Officer of ABN

AMRO and was appointed as Chairman of the Managing Board in November

2007.

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4. ORGANIZATIONAL STRUCTURE OF RBS

46

CHAIRMAN

Consumer

Head

Islamic

Head

Treasury

Head

SME

Head

HR

Head

OperationsHead

CEO

Corporate

Head

Risk Head

IT

Head

North Head

South Head

Central Head

Consumer Head

Commercial Head

Branch Banking Head

Distribution Head

Secured assets head

Unsecured assets head

RPB

GB


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5. BRANCH HEIRARCHY

Area Head

Floor

Manager

Operation

Manager

Branch Manager

PBC

Manager

Relationship

Manager

Cash

Lockers

Clearing&

collection

Remittance

GB - ARMSenior PBC

Junior PBC

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IV.FIELD OF ACTIVITES

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Royal Bank of Scotland is starting a new era in its growth path as one of the big private

banks in Pakistan by rendering an integrated package of distinguished services. The Bank

combines between a long-standing presence in the market, a present, and a bright future

secured by a mix of the Scottish and international professional experience. The severe

competition among all banks obliges ABN AMRO to provide services and manage

relations with customers in a distinguished manner. This actually represents the main key

to the aspired success of the new services given by the bank.

ABN AMRO has been keen to set an integrated expansionary plan at all levels.

Geographically, the Bank plans to double the number of its branches. On the

professional level, developed plans of action were adopted to change the Bank's policies.

This is one reason why Royal Bank of Scotland has now renamed ABN-AMRO. ABN

AMRO offers many new competitive products to the market to fulfill various customers'

needs in developing information technology and communications, thus enabling the Bank

to render high professional banking services.

The Bank gives special attention to expanding the finance of small and medium

enterprises (SME). The bank has also embarked on working in the field of micro finance

and offers a special program for this purpose. There are certain sections at branches for

rendering this type of loans. ABN AMRO is keen on introducing new savings schemes,

particularly micro deposits, to fulfill the needs of low-income customers. Along with

this, ABN AMRO also operates in the field of local and international corporate. This

includes such departments which are succeeded in attracting credit worthy customers and

arranging syndicated loans. This is positively reflects in the increase of the Bank's

revenues and distribution of the loan

portfolio risks. Furthermore, ABN AMRO also expands its retail banking services by

issuing all types of credit cards and extending personal easy-term loans which meet

customers' various needs. ABN AMRO plays a vital role in reinforcing Pakista

Documents

Abnamro Report