C I T I Z E N S F I N A N C I A L G R O U P

Annual Report 2008

HIGHLIGHTSUnprecedented volatility in the interest rate and foreign-exchange

markets allowed CFG to generate strong revenues from helping

commercial customers manage these risks. Revenues from this

activity were up 26 percent over 2007. We continued to help

customers with funding and capital-raising, reflecting 14 percent

growth in commercial loans.

CFG realigned its Retail branch network to focus on its core franchise and

contain costs by exiting two markets. In the fourth quarter of 2008,

CFG sold 18 branches in New York’s Adirondack region to Community

Bank System. It also reached agreement to sell to Old National Bank

the 65 retail branches, business banking and regional banking activi-

ties in Indiana. That transaction was completed on March 20, 2009.

Citizens Bank and Charter One launched Green$ense™, an industry-first

incentive program that helps the environment by rewarding new

and existing retail customers who enroll in the program with 10 cents

for each electronic transaction they make, up to $120 per year.

As part of a continuing effort to provide industry-leading banking services,

CFG enhanced its Online Banking Bill Pay system. Upgrades included

the ability to pay most bills electronically within 48 hours, and track

and manage payments from a new user-friendly interface.

The Business Banking division launched E-Z Deposit®, a remote deposit

service that enables small businesses to scan deposits and deliver

those images electronically to the bank via a secure Internet connec-

tion – saving travel time and providing valuable float benefits by

getting deposits into the bank faster than ever.

The company’s Confidential Waste Management program securely

collected, destroyed and recycled more than 9.9 million pounds of

paper in 2008, the equivalent of more than 84,000 trees and more

than 34,000 gallons of water saved through recycling – and a landfill

reduction of nearly 15,000 cubic yards of waste.

Citizens received major awards or rankings from Homes for Working

Families for home buyer assistance; RESOLVE: The National

Infertility Association; and the Dave Thomas Foundation for

Adoption for adoption assistance programs and other family-

focused benefits.

note: the Royal Bank of Scotland Group plc (“RBS”) now reports the results of CFG’s core businesses as “U.S. Retail and Commercial.” the results discussed in the Chairman’s message are consistent with RBS’s reporting practices. they are based on International Financial Report-ing Standards (“IFRS”). the information in the Financial Review section of this report reflects full CFG results as reported to U.S. regulators in accordance with United States Generally Accepted Accounting Principles.

2008

I want to begin by saying what an honor it was to be named Chairman of Citizens Financial Group. As I told our employees, I approach the role with confidence because of the depth of talent and commitment we are fortunate to have here at Citizens. I also want to thank Larry Fish for supporting me and for his many years of service.

Without question, the global economic crisis is stunning. The market turbulence and economic slowdown have been particularly difficult for banking – and it does not look like the problems will abate soon. However, CFG’s capital and liquidity remain strong. In lending we did better than most of our peers, particularly in our credit pro-file. We continue to have a very strong balance sheet – and are making loans, taking deposits and underwriting mortgages.

It was very positive news in February 2009 when our corporate parent, The Royal Bank of Scotland Group plc, announced, as part of a strategic review of all operations, that it will retain Citizens Financial Group as a key part of RBS. Citizens met the Group’s five strategic tests: we have a clear competitive advantage in our core markets, gen-erate strong return on equity and organic growth in normal economic times, and our businesses are a great fit with RBS Group. Moreover, Citizens has a strong franchise and an attractive banking portfolio in our core markets. We are a key contrib utor to RBS’s earnings, and improve the Group’s geographic balance and growth opportunities.

C H A I R M A N ’ S M E S S A G E

1

When historians write about this period, it’s my

hope that they will point to organizations like ours

as examples of those who weathered the hard times

by serving our customers, our colleagues and our

communities. Even in this challenging time, we are

stable, strong and invested in the many communities

we serve.

On the consumer banking side, our Fit campaign took root in 2008 to help customers find the most appropriate products and services to meet their financial services needs. As part of a continued effort to pro-vide industry-leading banking ser-vices, CFG also enhanced our Online Banking Bill Pay system. Upgrades included the ability to pay most bills electronically within 48 hours, and track and manage payments from a new user-friendly interface.

The launch of the Accelerator Rewards Platinum™ MasterCard® during the summer of 2008 rewarded customers with fuel discounts when they needed relief from high prices at the pump – and resulted in CFG’s highest number of new account openings per branch per month.

In early 2009, we launched the Great Start program to help people get back on track financially, because we know that kind of help is more important now than ever before. This year we are also rolling out Money-HelpSM to assist customers in the areas of financial education, basic budgeting and managing cash flow.

On the small-business side, we launched the E-Z Deposit remote deposit service for our Business Banking customers in 2008. It enables business owners to scan deposits and deliver those images electroni-cally to the bank via a secure Inter-net connection. It saves them the time spent traveling to and from their bank branch, and offers valu-able float benefits by getting depos-its into the bank faster than ever.

Because of the global nature of the business segment, we rebranded our Mid-Corporate Banking team as RBS Citizens. Doing so underscores the global capabilities available through RBS’s teams in dozens of countries, as well as the strong con-

2 c h a i r m a n ’ s m e s s a g e

2008RBS’s U.S. Retail and Commercial division, which consists of CFG’s core businesses that have led to the company's long-term success – consumer and commercial banking and related businesses – generated an operating profit of $972 million. That was down 57 percent from 2007, before good will writedowns and restructuring charges caused by the worsening of economic condi-tions over the course of 2008.

Modest growth in net interest income was offset by a small decline in noninterest income. Average loans and advances to retail custom-ers decreased because of the slow-ing economy and prudent under-writing standards. The latter decline was offset by continued strong growth in corporate and commercial lending. The volatility in the interest rate and foreign-exchange markets allowed CFG to generate strong revenues in 2008 by helping our commercial customers manage these risks. Revenues from this activity were up 26 percent over 2007. We continued to help customers with funding and capital-raising, as commercial loan balances were up 14 percent during 2008.

Total income of $5.6 billion was essentially unchanged, with 11 per-cent growth in commercial banking to $1.2 billion, offsetting a 2 percent decline in retail banking income to $4.3 billion. Both segments were affected by the deterioration in credit conditions, with retail contribution down 58 percent to $926 million and commercial contribution down 7 percent to $711 million.

Direct expenses rose by 5 percent to $2.0 billion, reflecting continued investment in the division’s commer-cial banking business, write-downs on mortgage servicing rights and

the added cost of managing prob-lem loans. Our impairments were 184 percent higher than in 2007 at $1.93 billion, reflecting the dete-rioration in economic conditions.

In the fourth quarter of 2008, we also took steps to exit certain markets whose prospects for growth or market position did not meet our goals. We sold 18 branches in the Adirondacks region of upstate New York to Community Bank System; and we sold the Indiana branch banking network, consisting of 65 branches, and the Indiana business banking and regional banking activities, to Old National Bank. The latter transaction closed in March 2009.

The savings from these and other efficiency moves is being rein-vested in marketing, sales initiatives and more-robust technology that will enable us to better serve our customers through our community-based delivery model.

New initiatives Citizens formed an Innovation Team, in partnership with RBS, to strengthen our ability to deliver new ideas that meet the changing needs of our customers – and ensure that the products and services we provide remain competitive.

Green$ense, an industry-first incentive program, is a terrific exam-ple: it helps the environment by rewarding new and existing retail customers who enroll with up to $120 per year for making electronic transactions. By keeping the cus-tomer at the heart of everything that we do, our innovative service and support will evolve with cus-tomer needs and help fuel our com-pany’s future growth and successes. We will continue to invest in tech-nology, marketing and sales initia-tives to make that happen.

nections that CFG has with such institutions as Bank of China.

Finally, Our Credo, codified seven years ago to summarize CFG’s long-standing corporate values, was updated to reflect such key business principles as diversity, environmen-tal responsibility and accountability to stakeholders.

Executive LeadershipSince being named President of CFG in March 2008, Jim Connolly has helped implement a reorganization designed to build even stronger relationships with our consumer and corporate customers.

As we move forward, Jim will support me with broader market-

facing, governance and leadership responsibilities across the franchise. He is responsible for leading all of our Corporate Banking businesses including the Commercial Markets, Commercial Finance and Commercial Real Estate Finance client segments. Jim also will chair a customer advi-sory board and the Citizens Charita-ble Foundation, leading our outreach efforts in the community.

Colleague InitiativesWe continue to support our col-leagues through a variety of best-practice benefits. We expanded our matching gifts program, Give As You Earn, that matches colleague contributions to eligible nonprofit organizations on a 1:2 basis, which means for every dollar a colleague donates up to a $1,000 annual maximum, the total contribution to those nonprofits can reach $3,000.

We continue to receive national recognition for our colleague bene-fits programs:

• Homes for Working Families honored Citizens with a Pioneer Award for leadership in employer-assisted housing. More than 4,000 colleagues have participated in the Home Buyer Assistance Program, which offers forgivable five-year loans of up to $8,000, at a company cost of $20.8 million since the program’s inception in 2002.

• RESOLVE: The National Infertility Association honored Citizens with its Hope Award for being on the leading edge of offering health insurance, adoption benefits and parental leave time for employees working to build their families.

• For the second consecutive year, the Dave Thomas Foundation for Adoption honored Citizens as the top financial services firm on its list of the country’s 100 most adoption-friendly workplaces. Citizens ranked No. 2 in the foun-dation’s overall ranking.

Community InitiativesThe communities in which we live and work are under more stress than ever – and we continue to sup-port them with programs and fund-ing that help meet their needs. Two major initiatives that we began in

3

2008 include Supergrounds, an alli-ance with city officials and local nonprofits to create or rehabilitate playground sites in low- and moder-ate income areas, and an increased focus on financial literacy through MoneyHelp, the U.S. version of RBS’s MoneySense program. More details on our community programs are available in the Community Involvement section that begins on page 20.

Positioned for the futureWe have taken significant steps to further strengthen our balance sheet and position ourselves for the future. We are focusing on our core markets and developing deeper relationships with our customers there as we continue to grow our business organically and strive to become the top regional bank in our footprint.

When historians write about this period, it’s my hope that they will point to organizations like ours as examples of those who weathered the hard times by serving our customers, our colleagues and our communities. Even in this challenging time, we are stable, strong and invested in the many communities we serve.

Ellen AlemanyChairman and Chief Executive OfficerCitizens Financial Group, Inc. and RBS Americas

James G. ConnollyPresident

4

It is only fitting in this year’s Annual Report that we pause to reflect on the imprint that Larry Fish has made on our company, and the community at large, in his often-combined roles over the past 16 years as Citizens Financial Group’s Chairman, Presi-dent and Chief Executive Officer.

Since his arrival in April 1992, Larry oversaw Citizens’ growth from a relatively small banking company with a focus on Rhode Island and southeastern Massachusetts into a bank with a presence in 13 states, and a top 10 ranking among U.S. commercial banking companies. His encouragement and vision led CFG through 25 acquisitions and, in many years, double-digit organic growth in the company’s market-place as it expanded throughout New England, and into the Mid-Atlantic and the Midwest.

Under his leadership, and with the strong support of RBS, CFG grew from just over $4 billion in assets to more than $160 billion; from 2,000 colleagues to more than 24,000; from 60 retail branches to 1,600. Through its in-store branches in the Citizens Bank and Charter One franchises, CFG became the No. 2 supermarket banker in the United States.

Despite all of that tangible success, his greatest impact involved the character of our company and the thousands of men and women who collectively have made CFG a success.

A lot of things that Larry put into place became foundational. He cod-ified Citizens’ historic but previously intangible corporate character traits – its core values – into the company’s Credo, which continues to thrive today. Bottom line: our success is all about people: the customers, the colleagues and the communities where we live and work.

His noteworthy accomplishments involved creation of CFG’s Commu-nity Service Sabbatical program, Champions in Action®, Colleague Appreciation Week, a personal and corporate commitment to improved educational, advocacy and natural-ization services to the immigrant and refugee community, a strong commitment to small business, and to home buyer assistance and adoption assistance for colleagues reaching for the American Dream of owning their own homes or enrich-ing their families.

The Community Service Sabbatical program grew out of Larry’s own pre-Citizens sabbatical at the Log School Settlement House, which

opened in 1974 as a place to help immigrants in Boston’s Dorchester neighborhood. Larry spent three months there in early 1992. He scrubbed walls and floors. He passed out food and clothes, read to chil-dren while their parents worked, befriended clients young and old – and learned first hand about issues of poverty and race as he handled many chores for which the Log School staff never seemed to have time. Since the CFG program began in 1994, more than 75 colleagues have had similar life-changing experiences assisting nonprofit social services agencies across the company’s footprint.

In an often-quiet way, Larry has excelled at community leadership – using his banking experience to help make the world a better place, imbuing his colleagues and his peers in the upper echelon of the financial services industry with the under-standing that being successful and caring are not mutually exclusive. Nor should they be.

Best wishes in all of your future endeavors, Larry.

A TributeL A R R Y F I S H’S V I B R A N T L E G A C Y

In an often-quiet way, Larry has excelled at community leadership – using

his banking experience to help make the world a better place, imbuing his

colleagues and his peers in the upper echelon of the financial services

industry with the understanding that being successful and caring are not

mutually exclusive. Nor should they be.

We want to help you grow, create and innovate.

Our major business groups – Commercial Markets,

Commercial Real Estate Finance, Commercial Finance,

Consumer and Business Banking, and Global

Transaction Services – have a well-developed and

successful core strategy of building deep, long-term

customer relationships in which we are a trusted

advisor and primary banking partner.

Whether they are working with small businesses or

large corporations, our seasoned relationship managers

have risen to the extraordinary challenges of the current

economic environment and have been able to provide

essential value-added services to their clients. That

approach is key to our goal of being the top regional bank

in our footprint. Selecting from an extraordinary array

of financial instruments offered throughout dozens of

countries, our clients feel the benefits that our interna-

tional network provides in a global economy that is under

unprecedented stress. Our scope and breadth in Asia

remain strong. The combined capabilities of RBS, ABN

AMRO and Bank of China offer industry-acknowledged

foreign exchange, trade finance and cash management

services, all invaluable resources to our clients conducting

business in Asia. Although RBS no longer has an owner-

ship interest in Bank of China, the partnership continues.

Our relationship managers continue to remain trusted

advisors for their customers – around the corner and

around the globe.

Middle-Market Banking

Citizens Bank and Charter One

Middle-Market relationship

managers are dedicated to develop-

ing and supporting long-term

relationships with companies in

New England, the Mid-Atlantic and

the Midwest generating annual

revenues between $25 million and

$500 million. Our relationship

managers have a keen awareness

of today’s harsh business climate

and understand the importance of

keeping their clients well informed

of market developments, given

the intense competitive pressures

this segment faces. With access

to resources and products vital to

sustaining their clients’ businesses,

our relationship managers are key

partners in helping them achieve

success under the current formida-

ble economic conditions.

6

Corporate Banking

Vera Bradley is an internationally

known designer and manufac-

turer of stylish handbags, travel

items, eyewear and stationery.

The company, headquartered in

Fort Wayne, Indiana, was founded

by Patricia R. Miller and Barbara

Bradley Baekgaard in 1982 after

they foresaw a niche for feminine-

looking luggage.

Charter One began its relationship

with Vera Bradley in 2008 as

syndication agent on a revolving

loan/term loan facility.

During a meeting to discuss Vera

Bradley’s financing needs, the

company mentioned a change in

its supply chain, having estab-

lished a Wholly Owned Foreign

Enterprise (WOFE). We took the

opportunity to highlight our inter-

national capabilities/partnership

and quickly arranged a conference

call with Rose Askin. Askin worked

closely with Vera Bradley’s local

manager and the overseas branch

Foreground: Vera Bradley Designs Inc. Founder and Co-President Patricia R. Miller and Senior Vice President Brian D. Smith of Charter One, Indiana. Background: Senior Vice President Rose Lee Askin, CFG’s China Liaison; Vice President Eric Harvey of Charter One, Indiana; and Vera Bradley Designs CFO David R. Traylor.

Vera Bradley Designs Inc.

to establish several accounts. In

addition, Vera Bradley’s U.S.-based

international holding company

opened a deposit account with

Charter One.

“Working with Charter One has

helped the company to quickly

establish the necessary accounts

and transfer of funds needed to

support our international office.

The entire Charter One team was

very responsive in meeting our

needs,” said Vera Bradley Designs

CFO David R. Traylor.

Demonstrating our overseas

capabilities has positioned us as

a trusted international advisor.

We are also in discussions on

providing hedging for the local

currency. In the Citizens Bank-

Charter One market, an interna-

tional team is a key differentiator

from our competitors – and

one we plan to use extensively

in 2009.

7

Mid-Corporate Banking

Working tirelessly to build and

strengthen our relationships with

corporations generating annual

revenues from $500 million to

$2 billion, Mid-Corporate relation-

ship managers develop a thorough

understanding of our customers’

complex needs in an intensely

competitive international market-

place now rife with instability.

Senior Vice President Leslie D. Broderick of RBS Citizens’ Mid-Corporate Banking team with President & CEO Michael J. Barrist (right) and Executive Vice President and Chief Financial Officer John R. Schwab at NCO Group in Horsham, Pennsylvania. RBS Citizens became the company’s lead relation ship bank in 2008. RBS Securities Inc. (formerly RBS Greenwich Capital) was the Sole Lead Arranger and Sole Bookrunner on a $139 million Add-on Senior Secured Credit Facility that enabled NCO to acquire its largest competitor. RBS Citizens is the Administra-tive Agent for NCO’s senior debt facilities.

With relationship managers

located throughout New England,

the Mid-Atlantic and the Midwest,

we have the competitive advantage

of proximity to our customers,

an important factor in these trying

and uncertain times. This proximity,

combined with a long-term focus

on relationships and access to a

wide array of global products and

services has made our relationship

managers the trusted advisors to

whom our clients turn.

Government Banking

The Government Banking division

is the primary sales, marketing

and service-delivery group to gov-

ernment entities throughout our

footprint. It had total funds under

management of $14.1 billion as of

December 31, 2008, which resulted

in a ranking of 4th among the top

8 c o r p o r a t e b a n k i n g

RBS Asset Finance

As the 10th-largest bank-affiliated

lessor/lender in the United States

with a portfolio of $5 billion, RBS

Asset Finance provides our customers

with a significant depth of resources

and services including equipment

acquisition, recapitalization, work-

ing capital and liquidity, and bal-

ance sheet management. Industry-

specific experts cover business

aviation, structured products and

indirect sales.

Global Transaction Services –

Cash Management

Business today requires even

smaller companies to manage cash

on a worldwide basis. Efficien cies

are harder to come by, and compa-

nies need to control an increasingly

complex web of trans actions. At the

same time, the pressure is escalat-

ing to reduce the capital tied up

in the day-to-day running of your

business.

The depth of our world-class

innovative solutions and the breadth

of our global reach give us the flexi-

bility to meet your demands, no

matter how complex or geographi-

cally wide-ranging. CFG’s Global

Transaction Services is a top-five

global cash manager because of our

leading product range and exten-

sive geographical coverage.

From single proprietorships to

large multi-national clients, our

domestic and international services

are designed to accelerate collec-

tions of accounts receivables,

manage the distribution of funds

and provide enhanced short-term

liquidity.

20 U.S. banks managing public

deposits. At a time when state and

local budgets are under extreme

pressure, our seasoned profession-

als have the expertise and local

regulatory knowledge to meet the

needs of governmental entities.

Our teams provide a range of

services to state governments,

counties, municipalities, public

schools, trustees, commissions,

authorities and districts. They have

proven track records in implement-

ing effective, targeted strategies

for cash management, investment

management, lending and other

banking needs. The need to under-

stand the pressures our government

clients face has never been more

acute. Enhancing that understand-

ing is our active role in the national,

state and local associations that

are important to our clients.

The Indiana Finance Authority

The Indiana Finance Authority,

the financing conduit for

economic development projects

within Indiana, was seeking a

liquidity provider for the auction

rate bonds to finance Lucas Oil

Stadium, home to the Indianapolis

Colts NFL team. The Government

Banking team worked with

Charter One’s Middle-Market

team to structure the financing.

Additional financing requirements

to complete construction of the

stadium, as well as to expand

the Indiana Convention Center,

brought the total credit participa-

tion for Charter One to more than

$145 million. As part of this trans-

action, the State moved additional

deposits totaling $161 million to

Charter One. The Indiana Finance

Authority was working under very

tight timelines and we accepted

that challenge to help it complete

the project on time and within

budget for the August 2008 open-

ing of the Colts’ first home game

in the new facility, which will be

the site of the 2012 Super Bowl.

Upon completion of the Conven-

tion Center expansion, Indianapo-

lis will rank 16th in the nation for

convention space, a goal Charter

One helped the State achieve.

9

Senior Vice President Chuck Woodard (left) of Citizens Bank’s Private Equity Banking team, visits WL Ross & Co. Chairman and CEO Wilbur L Ross and CFO Michael J. Gibbons at the firm’s Manhattan headquarters.

WL Ross & Co. LLC

tapped into the Private Equity CFO

Association to find a new banking

partner. The association was

founded in 2001 by Citizens Bank

as a way for private equity finan-

cial professionals to network and

communicate through a common

forum and today has more than

750 members.

Gibbons reached out to Citizens

Bank Relationship Manager Chuck

Woodard, who also serves as the

association’s Executive Director,

and inquired about commercial

banking services. Within a few

days, Woodard and his team,

Jeff Regan and Neil Hibel, were in

WL Ross’s office demonstrating

the bank’s capabilities. “We were

impressed with the bank’s knowl-

edge, professionalism and full

complement of products, espe-

cially its Web-based reporting

tools. We felt immediately that

Citizens would make a great part-

ner,” said Gibbons.

After an efficient transfer of its

cash and custodial accounts to

Citizens Bank, WL Ross began

using the bank’s Global Processing

Solutions system to handle its

cash management needs and set

up a $200 million capital call line

for the firm’s newest investment

fund. The relationship has been a

sound investment ever since.

WL Ross & Co. LLC (WL Ross) is a

global private equity investment

firm with more than $8 billion

of assets under management.

The company is led by Chairman

and Chief Executive Officer Wilbur

L. Ross Jr., and is headquartered

in New York City. The company

specializes in improving the finan-

cial condition of distressed busi-

nesses by utilizing its expertise as

an activist creditor with significant

transaction experience and per-

forming complex financial and legal

analysis in order to make sound

direct private equity investments

in these troubled companies.

The financial industry was rocked

by crisis after crisis in 2008, caus-

ing WL Ross to re-think its banking

relationship. Seeking stability and

certainty, CFO Michael J. Gibbons

Aegis Group plc

Citizens’ Foreign Corporate

division, RBS’s Global Banking

and Markets division and Global

Transaction Services worked

jointly to develop a tailor-made

global liquidity solution for the

London-based global marketing

communications firm, Aegis

Group plc, which has a significant

U.S. presence. An extensive global

network, robust technology infra-

structure and innovative, award-

winning liquidity management

solutions quickly resulted in our

being able to meet Aegis’s bank-

ing needs in Asia and North

America. Our proactive and con-

sultative approach, strong support

from the relationship manage-

ment team and a superior solution

resulted in Aegis selecting the

CFG/RBS/ABN AMRO team to

meet its global liquidity manage-

ment needs.

10 c o r p o r a t e b a n k i n g

Specialized Lending

Understanding the intricate needs

and challenges of niche businesses

enables our team of experts to

respond quickly to provide tailored

solutions to their clients. The busi-

nesses in which we have a noted

expertise include account ing and

law firms, energy and utilities,

fuel distribution, insurance, not-for-

profit/health care, private equity

firms, publishing, security alarm,

service industry franchises and

technology banking.

Senior Vice President Neran Shaya of Charter One’s Not-for-Profit/Health Care Group meets with School Leader Tim Green at Allen Academy in Detroit.

Allen Academy, a charter school

in northwest Detroit, opened in

1999 in a renovated church with

the goal of becoming a “new

kind of public school.” Enrollment

has grown every year to its current

1,006 students under the leader-

ship of School Leader Timothy

Green.

The school celebrated a 100 per-

cent graduation rate in 2008,

with many students continuing

their education in college or voca-

tional training. Faculty, parents

and the surrounding community

work together to ensure the

students’ academic success.

Allen Academy is managed by the

Leona Group, L.L.C., the largest

charter-school organization in the

country. The privately held company

was formed in 1996 in Michigan

by William Coats, Ph.D., a national

leader in public education reform.

It has public charter schools in

Indiana, Michigan, Arizona, Ohio,

Louisiana and Florida.

Allen Academy

Leona turned to Neran Shaya of

Charter One’s Not-for-Profit/

Health Care team for a working-

capital solution to manage routine

operating payables throughout

the year that were out of sync

with the distribution schedule for

school aid managed by the state.

Charter One provided Leona with

a comprehensive solution that

included separate lines of credit

for the majority of its charter

schools and a streamlined cash

management solution for all of

its deposit accounts and payroll

services. Allen Academy received a

$975,000 State Anticipation Note.

“When Leona needed new ideas

and solutions – a strategic partner

– Neran Shaya was there,” said

Coats, who is Leona Group’s CEO.

“Leona and all its charter schools

value greatly the relationship

which we have with Charter One.”

Vice Presidents Edie Anderson (foreground) and Deidre Lockhart (far left) of Citizens Bank’s Franchise Lending team with Don and Paula Wright, who own and operate nine McDonald’s franchises in southern New England. The Franchise Lending team works closely with a wide variety of franchise operators across the United States.

Necessity was the catalyst for

creating SmartPak Equine LLC.

The Plymouth, Massachusetts

company was founded in 1999

when owner Becky Minard discov-

ered that her horse Westley

wasn’t getting his daily supple-

ments consistently at her board-

ing barn. She’d check his feed

bucket, and his supplements

would often be missing or not

dosed correctly. The barn staff had

to feed 35 horses an average of

three supplements per day. That’s

105 supplement doses to be

opened, measured, fed and

resealed every day. No easy task.

As a loving pet owner, the Harvard

Business School graduate devel-

oped a simplified solution that

would make feeding time easier

and horses’ lives better. SmartPaks

contain a horse’s supplements

and medications in custom-made,

daily dose packs to eliminate

feeding mistakes.

The multi-million-dollar company,

named to Inc. Magazine’s list of

the 500 fastest-growing private

companies for the second straight

year, has served more than 150

million supplements in customized

daily dose SmartPaks, delivered in

automated monthly shipments, to

clients across the county.

Minard and her husband and busi-

ness partner, Paal Gisholt, chose

Citizens Bank for its commitment,

understanding of their business

and eagerness to grow together,

as well as the personal attention

Relationship Manager Marilyn

Agulnick-House and senior execu-

tives offer to the company.

In addition to the supplement

system, SmartPak offers a broad

line of horse health and rider

items, dog supplies, and equine

and canine pharmacy items

through its catalog and Web site.

“Citizens truly understands our

banking needs and is eager to pro-

vide financial advice and guidance

as we continue to grow our busi-

ness,” said Minard. “We are a car-

ing company committed to our

clients and their needs – and are

proud to work with a bank that has

the same philosophy as we do.”

SmartPak Equine LLC

11

Senior Vice President Marilyn Agulnick-House (center) of Citizens Bank’s Regional Banking Group with SmartPak Equine owners Becky Minard and Paal Gisholt, and Becky’s horse, Westley.

RBS Business Capital

Our asset-based lending group is

one of the largest providers of

secured asset-based loans in the

United States, with a national effort

managed through seven regional

offices in Atlanta, Boston, Cleveland,

Chicago, New York City, Philadelphia

and Pittsburgh. Our highly trained

professionals can provide or arrange

complete financing for all transac-

tion sizes – from a basic working-

capital line of credit to a complex,

multi-bank syndication.

Regional Banking

The Regional Banking relationship

managers located through out the

Citizens Bank and Charter One

footprint focus their energies and

expertise on companies in New

England, the Mid-Atlantic and

the Midwest generating annual

revenues between $10 million and

$25 million.

Global Markets –

Foreign Exchange

Changes in foreign-exchange trends

or unexpected market volatility

can complicate the best laid plans.

To give our clients the edge in the

international marketplace, dedi-

cated Global Markets teams in New

England, the Mid-Atlantic and the

Midwest emphasize a consultative

approach to helping clients manage

their foreign exchange risk. We can

provide full international product

delivery in more than 75 currencies

and offer strategies to hedge

against currency rate fluctuations

that may adversely affect our

clients’ businesses.

12 c o r p o r a t e b a n k i n g

Wealth Management

We provide customized portfolio

management and trust services

to high-net-worth individuals,

non-profit organizations, corpora-

tions and retirement plans. Planned

giving and endowment growth

solutions strategies are offered to

the nonprofit sector while Citizens

Retirement Plan Services team

provides 401(k) and 403(b) plans

and retirement plan administration

services. The Wealth Management

officers work with relationship

managers, branch managers and

business banking officers to ensure

that all customers have complete

and informed teams serving their

needs.

Global Markets – Interest Rate

Risk Management

Interest rate exposure can be a risk

for any company. Our seasoned

Interest-Rate Risk Management pro-

fessionals assist our clients with

evaluating, structuring, and execut-

ing appropriate rate risk manage-

ment solutions. The team’s approach

is proactive, consultative and

designed to meet borrowers’ objec-

tives in any market environment.

It will work to identify interest

rate exposure, set objectives for

hedging, consider the instruments

available, and propose solutions

that incorporate your company’s

individual risk management criteria.

Hedging instruments include

options, forwards, swaps, swaptions,

caps, floors, collars and combina-

tions and variations of these instru-

The Brack Family

The Brack family, former owner

of Barker Steel Company in

Milford, Massachusetts, and now

a minority partner in Barker Steel

LLC, a Harris Rebar Company, has

had a 67-year relationship with

Citizens Bank. The bank has been

there to help the business grow

over four generations.

When the family decided to sell

the business to a larger steel com-

pany based in Canada, our Wealth

Management team helped the

family through that transition,

meeting with all the family mem-

bers to assess their individual

needs, and advise them of their

opportunities and choices.

Multiple accounts were opened

to take each family member into

this new phase of wealth, which

was no longer tied entirely to the

success of the one business they

controlled, but instead was tied to

the growth of a diversified securi-

ties portfolio. We also opened a

family foundation to continue the

family’s interest in giving back to

the community.

Upon opening the investment

accounts, the family’s words were:

“You have 70 years of Brack Family

hard work in your hands.” We

understand this sentiment, which

guides our prudent management

of our clients’ assets every day,

especially now.

The longevity of this relation-

ship and its lifecycle transforma-

tion, from wealth building on the

commercial side to building a fam-

ily legacy on the investment side,

is a testament to the consistent

superior service and teamwork

that is pervasive throughout CFG.

ments. We have outstanding

resources to make available to our

customers and a track record of

success with our clients.

Global Transaction Services –

Trade Finance

Although trade volumes are

down globally, the need for trade-

financing services remains for any

company, large or small, involved

in importing and exporting. Those

services require a thorough under-

standing of cross-border issues.

Full knowledge of regulatory con-

straints and the impact of tax and

accounting codes, as well as com-

plete familiarity with the economies

of countries in which our clients do

business, make our trade finance

specialists valuable partners.

Our solutions range from the

traditional payments products

that underpin international trade –

such as letters of credit – to support

for open-account trading and the

financing of supply chains. Our sup-

ply chain solutions are highly effec-

tive in strengthening the relation-

ships upon which our clients’ success

depends between buyers, strategic

partners and core suppliers. Our

award-winning Web-based trade

platform offers a secure point of

access to all of our trade processing

and supply chain finance solutions.

Our solutions make trading across

borders as efficient, straightforward

and secure as possible. In addition,

we are a Delegated-Authority Lender

for the U.S. Export-Import Bank.

13

Senior Vice Presidents Timothy L. Leon (left) and Zach David of Citizens Bank’s Commercial Real Estate Finance team meet with Executive Vice President A. Leslie Ludwig of The JBG Companies.

One of CFG’s core business lines,

Commercial Real Estate Finance,

has experienced steady and solid

growth on the national level. Over

the past year, the Citizens team

has moved deeper into the Wash-

ington, D.C., metropolitan area, a

region consistently ranked as one

of the top commercial real estate

markets in the country due to

its ability to withstand economic

volatility. The JBG Companies is

one the cornerstones of the team’s

growing portfolio.

Since 1960, The JBG Companies

has been a leading investor, owner

and developer in the Washington

area’s real estate market. Its diverse

portfolio encompasses millions of

square feet of office, multi-family

residential, hotel and retail proj-

ects, and includes many of the

region’s most distinguished prop-

erties throughout the District of

Columbia, Maryland and Virginia.

Citizens has cultivated its relation-

ship with JBG by serving as a

depository, providing cash man-

agement, project finance and a

subscription line facility to meet

the company’s diverse needs.

Citizens continues to work

closely with JBG on upcoming

projects, including a LEED Gold

Pre-Certified building that would

be the tallest business center in

the nation’s capital.

“Whether we’re working with

our relationship manager or the

bank’s senior management, the

Citizens’ team is responsive at

all levels,” said A. Leslie Ludwig,

Executive Vice President, Corpo-

rate Finance at The JBG Compa-

nies. “Even in the current eco-

nomic conditions, the Citizens

team has been able to provide us

with creative solutions to meet

our business needs and respond

to market challenges.”

The JBG CompaniesCommercial

Real Estate Finance

CFG’s Commercial Real Estate

Finance division leverages the

strength and market knowledge of

experienced real estate lenders

throughout the franchise. Our bank-

ers understand the difficulties their

clients face and are able to provide a

wide range of specialized solutions

throughout the Citizens Bank and

Charter One footprint. We bank the

best-known real estate developers,

merchant builders and investors

within each region.

The credit products we offer

include acquisition and develop-

ment loans, bridge financing,

permanent mortgage financing,

construction financing, as well as

letters of credit and revolving lines

of credit. We offer a complete array

of customized deposit products

including tenant escrows, remote

deposit and a complete suite of

cash management products for

commercial real estate companies.

Exceptional Service Delivered Locally

14

How do you build brand loyalty? It starts with having a

great brand, solid products and terrific customers. But

something deeper makes a company successful. In our

case, local decision-making and customer familiarity

are key. That’s why we have talented local presidents and

teams of bankers on the ground as we work to become

the top regional bank in our footprint. They know their

communities and they know their customers. They pride

themselves on their responsiveness and sense of

responsibility. That dedication has enabled our company

to build and grow relationships with our customers and

community partners who work so hard to achieve their

own corporate, personal and community goals. Local

delivery means timely decision-making and access to

senior management as we work to build – and strengthen

– those relationships. How, you ask? We answer the

phone. We call you back. We get to know you. We work

to understand your business – and your financial needs.

And we always thank you for doing business with us.

ConnecticutRichard M. BarryPresident

Branches 49 ATMs 67

DelawareDaniel K. FitzpatrickPresident

Branches 26 ATMs 45

IllinoisScott C. SwansonPresident

Branches 102 ATMs 322

MassachusettsRobert E. SmythPresident

Branches 250 ATMs 585

MichiganSandra E. PiercePresident

Branches 111 ATMs 124(also includes commercial loan office in Indiana)

Robert M. CurleyNew York

New Hampshire Cathleen A. SchmidtPresident

Branches 76 ATMs 156(also includes commercial loan office in Maine)

New JerseyDaniel K. FitzpatrickPresident

Branches 15 ATMs 65

New YorkRobert M. CurleyChairman

James P. Gaspo President

Branches 216 ATMs 274

Ohio Sandra E. PierceInterim President

Branches 148 ATMs 169

Pennsylvania Ralph J. PapaChairman

Branches 359 ATMs 648

Daniel K. Fitzpatrick PresidentEastern Pennsylvania(also includes a commercial loan office and 4 ATMs in Virginia)

Rhode IslandJoseph J. MarcAurelePresident

Branches 77 ATMs 151

Vermont Cathleen A. SchmidtPresident

Branches 23 ATMs 24

Richard M. BarryConnecticut

Cathleen A. SchmidtNew Hampshire and Vermont

Daniel K. FitzpatrickEastern Pennsylvania, New Jersey and Delaware

Ralph J. PapaPennsylvania

Joseph J. MarcAureleRhode Island

Scott C. SwansonIllinois

Sandra E. PierceMichigan

Robert E. SmythMassachusetts

15

James P. GaspoNew York

L O C A L L E A D E R S H I P

16

Retail Banking

Delivering world-class service, sup-

port and innovation is paramount

to our growth and success. We help

our customers save money, make

money and give them peace of mind

by finding the right fit for their lives

and businesses with products and

services designed to grow, retain

and deepen customer relationships.

Consumers want a bank that

provides personalized solutions to

fit their busy lives, so in early 2008

Citizens Bank and Charter One

introduced the Fit brand strategy.

Fit is all about “banking that fits

your life, not the other way around”

and increases customers awareness

of our ability to always find the right

“fit” in banking products and services

to help them achieve their financial

goals. Fit enables our customers to

bank how, when and where they

want and helps them find the right

product at the right time.

Consumers are looking for ways to

get the most value from their bank-

ing relationship. With Green$ense,

our industry-first rewards program,

our customers are rewarded every

time they pay without paper – earn-

ing up to $120 per year. It also pro-

vides an innovative and competitive

response to the growing expectation

from consumers for an easy, conve-

nient way to reduce their impact on

Brothers Nik (left) and Sonny Wadhwa are high-performing branch managers in the Retail Partnership Delivery Group, running in-store branches in South Attleboro and Easton, Massachusetts, respectively. Both are active in the Massachusetts and Rhode Island Indian communities as ambassadors for Citizens Bank and for RBS.

O U R C O N S U M E R B A N K I N G P H I L O S O P H Y

Customers are at the heart of everything we do. With

an innovative selection of products and services, our

Retail colleagues are dedicated to providing world-class

customer service that will help consumers meet their

individual needs at every stage of life. In that process,

they also build strong and lasting financial relationships.

Consumer and Business Banking

17

the environment. Green$ense

includes automatic enrollment in

e-Statements and free Online Bank-

ing with Bill Pay.

Citizens Bank and Charter One

customers experienced significant

improvements to the way they bank

and pay bills online. Enhancements

such as faster bill payments, easier

navigation and convenient e-bills

have evolved their online banking

experience. Increased convenience,

efficiency and control help custom-

ers utilize the online banking chan-

nel effectively.

Our in-store branch network,

the No. 2 in-store banking franchise

in the country, saw strong growth in

2008. The Retail Partnership Delivery

Group is now a distinct business

line committed to maximizing

growth opportunities by leveraging

its partnerships. Innovative pro-

Donna Price manages Charter One’s Great Lakes Mall branch in Mentor, Ohio.

grams, like ExtraGreen with Stop &

Shop in Rhode Island and the

fuelperks! debit program with Giant

Eagle in western Pennsylvania,

reward customers with savings just

for shopping at their stores and

banking with Citizens Bank. 2008

also saw expanded relationships

with key partners including Acme

Markets in Philadelphia and Stop &

Shop in New York state’s Long Island

and Hudson Valley regions, both

providing added availability of

banking centers for shoppers. Our

in-store partnerships will continue

to be a key driver of growth and

innovation as customers look to us

for the convenience that in-store

banking provides.

In 2008, the residential borrowing

process evolved with the introduc-

tion of the Home Lending Solutions

Center. Through the HLSC’s dedi-

cated team of Home Loan Advisors,

customers now benefit from faster,

more consistent service and sup-

port from highly trained profession-

als who are committed to helping

them find the most suitable prod-

ucts and services to best fit their

home borrowing needs.

Citizens Bank and Charter One customers have the opportunity to bank with us when and where is most convenient for them through one of our more than 3,300 customer touch points. Customers can be confident that, no matter which delivery channel they choose, the products, services and support they count on will be there – whether it be face-to-face at one of more than 970 traditional or 479 in-store branches, walking up to one of our more than 2,600 ATMs, utilizing Online Banking anytime or calling our 24/7 PhoneBank.

When Citizens Bank and Charter

One customers invest with CCO

Investment Services, they can do

so with confidence knowing that

qualified Financial Consultants

are helping custom ers meet their

short- and long-term investment

goals. Whether customers are inter-

ested in estate planning, education

finance or retirement, CCO Invest-

ment Services offers a range of

competitive products and service

to meet all their needs.

RBS Card Services provides innova-

tive and customized solutions for all

of our customers’ credit card needs.

Customers can earn rewards on

their Citizens Bank or Charter One

credit cards just by selecting the

card with the rewards program that

fits their spending habits. In the

summer of 2008, customers received

relief from high prices at the gas

pump with double rewards on pur-

chases made with the Accelerator

Rewards Platinum MasterCard –

that’s nearly $.25 cash back on every

gallon of gas purchased. Debit

Rewards also offers a convenient way

for customers to earn points towards

great gifts just by using their debit

card. Customers can shop like always

and watch rewards add up that can

be redeemed for merchandise,

travel, banking benefits, and once-

in-a-lifetime experiences, just by

banking the way that fits their life.

Small Business

Citizens Financial Group continues

to innovate and expand its products

and services to help our valued

small-business customers grow their

businesses. Our dedicated Business

Banking professionals are well

positioned to provide the solutions

18 c o n s u m e r a n d b u s i n e s s b a n k i n g

that customers need to maximize

their cash flow, minimize banking

fees and build for the future.

Citizens Bank and Charter One’s

new E-Z Deposit remote deposit

service enables customers to make

deposits from their places of busi-

ness by using scanners to image-

capture deposits over a secure Inter-

net connection. It helps reduce the

number of trips to the bank – and

it improves cash flow.

We implemented the Provenir

Lending System’s new technology,

which allows our colleagues to

submit, monitor and update loan

applications via laptop from virtually

anywhere, with the option to sub-

mit critical support documentation

electronically to the lending centers.

This results in faster loan turnaround

times for our customers.

The Business Banking Group’s

new customer sales and service

channel features Business Banking

Relationship Managers – a locally

based relationship management

team that is dedicated to proactively

call on customer businesses that

require more personalized service.

This dedicated group offers custom-

ized products and services to help

custom ers manage and grow their

businesses.

Coordinated interaction with

customers by our Business Banking

Officers and Retail Branch teams is

the foundation for the personal

approach that is a hallmark of our

customer service.

Orbis Clinical Vice President Ron Norton, Citizens Bank Business Banking Relation-ship Manager Rich Rougier and Business Banking Officer Caitlin Egan Roos, and Orbis CEO Matt Garceau at the firm’s Woburn, Massachusetts headquarters.

Orbis Clinical LLC

Founded in 2004, Orbis Clinical is a

consulting company that provides

expertise in drug safety, risk man-

agement, regulatory affairs and

quality assurance. These capabili-

ties enable its clients to solve the

key tactical and strategic challenges

they face. Orbis Clinical concen-

trates on delivering flexible, client-

driven solutions to mitigate risk

and ensure regulatory compliance.

Caitlin Egan Roos, a Citizens Bank

Senior Business Banking Officer,

first contacted Orbis Clinical CEO

Matt Garceau in December 2007.

At the time, Orbis was satisfied

with its current bank, but Garceau

said his company was looking to

increase its working capital credit

facility, and he knew that prior

bank’s revised underwriting policy

would cost his firm more than

he wished to spend each year to

prepare audited financial reports.

“We wanted to focus on maintain-

ing a long-term relationship with

an institution that would be there

to grow with my company

through this tough economic cli-

mate and Citizens best demon-

strated that soundness and safety

I was looking for,” Garceau said.

With a credit facility request of

this size, Roos partnered with Rich

Rougier, a Business Banking Rela-

tionship Manager. Together, they

worked to win the largest credit

approval in 2008 for Citizens’ new

Business Banking Relationship

Manager channel in Massachusetts.

Rougier is assigned as Orbis’s dedi-

cated relationship manager to

ensure that all of its banking

needs continue to be satisfied as

the business grows.

Citizens Bank’s Business Banking

team met Orbis’s lending needs.

That relationship has since grown

to include the firm’s deposit

accounts as well as personal bank-

ing relationships for its executives.

Our Credo

Customers

We will do whatever we can every

day, in every way, to provide world-

class service and consistently

exceed customer expectations. We

will always honor our commitment

to customers and constantly give

them reasons to say “I love dealing

with these people.” We will treat

customers the way we would enjoy

being treated all the time. We will

know our customers and respond

to them rapidly. We will anticipate

their need and make it happen.

Colleagues

We want our company to be the

best place to work in the world. The

environment will be extraordinarily

caring, like an extension of our own

family. We will be supportive in

times of personal difficulty, create

opportunities for professional

growth, and always make an effort

to listen and act on our colleagues’

ideas. We will foster a diverse team

and treat every colleague with

dignity and respect at all times.

Community

We believe great companies have

a moral core. We care deeply

about our communities, and we

demonstrate this commitment

every day by responding where

there is need. We care about the

world’s limited resources and are

committed to their responsible

use. We will be ethical and honest

at all times. By giving back and

conducting ourselves with integrity,

we can make our customers and

colleagues proud of our company.

By fulfilling Our Credo every day, we will serve our shareholders

well and be one of the world’s most admired companies.

19

Assistant Vice President Anna Li, a Financial Consultant at CCO Investment Services, is based at Charter One’s Chinatown Square branch in Chicago.

20

Community Involvement

Supergrounds

Supergrounds, an alliance between

CFG, city officials and local non-

profits to rehabilitate or create

playground sites in low- and moder-

ate-income areas, was implemented

in three New England locations in

2008 through grants and volunteers.

RBS began Supergrounds as a $126

million, six-year program that has

already revitalized 500 parks, with a

goal of revitalizing 900 worldwide.

In 2008, CFG colleagues helped to

refurbish the Sackett Street Play-

ground in Providence, Rhode Island,

and the P.T. Barnum Housing

Complex playground

in Bridgeport,

In 2008, Citizens Financial Group invested

more than $22 million to the thousands of

communities that make up our footprint,

creating sustainable development for nonprofit

organizations and generating volunteer

opportunities for our colleagues at a time of

increased demand for nonprofits’ programs

and services.

Our approach to community outreach is defined by

our ability to harness the company’s resources to make a

greater impact on smaller nonprofits. We understand

that, to make a difference, it will take everyone working

together, investing resources and building solutions to

make the changes needed, to address our neighborhood’s

toughest problems. In 2008, we launched or expanded

a number of programs contributing to this goal.

21

Connecticut; and transformed two

vacant parcels of land in Codman

Square in Boston’s Dorchester

neighborhood into a vibrant park

for children and residents of all

ages. At the P.T. Barnum site, kids

from the neighborhood were lined

Champions in Action

Through Champions in Action®,

our signature community program

which operates in nine of our mar-

kets, we have directed more than

$4 million along with thousands of

volunteer hours to worthy, smaller

organizations that support impor-

tant local causes – such as youth

services, homeless shelters, com-

munity health care, housing groups

and elder support. As of 2008, the

number of nonprofits supported

CCO Mortgage Loan Officer Irv Brockington gives Rookie League players hints on how to master the Citizens Bank Game of Baseball, a ballpark version of pinball, in Ashburn Alley at Citizens Bank Park in Philadelphia. Citizens Bank has been a longtime supporter of the Phillies Rookie League, an outreach program that teaches base-ball fundamentals and teamwork to thousands of children ages 6 to 12, principally from inner-city neighborhoods.

Volunteers put together a slide at a Supergrounds playscape site.

up and ready to play even before

colleagues from Citizens Bank, RBS

Card Services and RBS Greenwich

Capital were done with their work –

cleaning and seeding playing fields,

planting trees, painting benches

and installing a new playscape.

22 c o m m u n i t y i n v o l v e m e n t

through this program rose to 160.

By collaborating with local media

outlets, these organizations have

also received close to $2 million in

television and print exposure and

more than 5,000 public services

announcements in 2008. These

three components – grants, media

exposure and volunteerism – provide

sustainability and build capacity by

addressing long-term needs.

Gear for Grades

Formerly known as Tools for School,

this footprint-wide program part-

nered with nonprofit agencies, local

governments and media organiza-

tions to provide more than 28,000

backpacks filled with notebooks,

crayons and pencils to children

One and YMCA volunteers at the

Charter One Pavilion at Northerly

Island, Chicago’s premier lakefront

music venue.

Community Cashback

Launched in July, CFG’s new Commu-

nity Cashback program provides a

$250 grant to an eligible nonprofit

at which a colleague has volun-

teered at least 50 hours over the

course of one calendar year. More

than 150 Community Cashback

awards have been requested since

the launch of this program, which

RBS expanded to the United States.

This adds up to more than 7,000

volunteer hours.

before they returned to school in the

fall. The need for basic supplies to

help children succeed in school has

increased, creating an even-greater

strain on already-struggling families.

Making Music Matter

In 2008, Charter One’s Making

Music Matter program generated

more than $200,000 for the YMCA

of Metropolitan Chicago’s Commu-

nity Schools initiative, which helps

to address the need for keeping kids

safe and families productively

engaged by providing educational,

supervised programming focused

on positive development for more

than 600 children in the Chicago

area’s most-challenged neighbor-

hoods. Funds were collected from

May through September by Charter

Fifth grader Myra Bessette helps Citizens Bank colleagues Brigitte Ritchie (left) and Ronda Robbins unload a van full of back-packs and school supplies destined for children staying at COTS family shelters in Vermont.

Illinois colleagues help generate excitement for the Making Music Matter program by cheering on donors who spun the Charter One prize wheel.

23

Community Service Sabbatical recipient Kate Lukacs, a Commercial Banking colleague in Ohio, tutored teen mothers at the Old Stone Center for Education in Cleveland to help them prepare for their GED tests.

Give As You Earn

Originally launched in 2007 as the

“Matching Gifts Program,” CFG

adopted the RBS program name,

Give As You Earn, in July 2008.

This expanded program matches

colleagues’ donations to eligible

nonprofit organizations on a 1:2

basis. For every $1 the colleague

donates, an additional $2 is matched,

bringing the total contribution to

the nonprofit to $3. More than

2,500 colleagues have participated

in the program, with a total match

amount of more than $428,000

in 2008.

United Negro College Fund Education Project

In 2008, CFG awarded $5,000

scholarships to 80 finalists for the

2008-2009 school year. Scholarships

were available to African-American

sophomores and juniors majoring

in business, finance, economics,

accounting, banking, or mathematics

at one of 11 colleges or universities

across the CFG footprint. Those

institutions included the University

of Hartford in Connecticut; Chicago

State University and City Colleges of

Chicago in Illinois; Suffolk University

in Massachusetts; Wayne County

Community College and Wayne State

University in Michigan; West Ches-

ter University, Cheyney University,

Temple University and the Univer-

sity of the Sciences in Pennsylvania;

and Rhode Island College.

Carving Out Hunger/Hunger Initiatives

CFG has established programs

across its footprint to prevent hun-

ger in local communities. These

programs – including Carving Out

Hunger, Harvest for Hunger, Striking

Out Hunger and Kids Can Help –

combine food and monetary dona-

tions from CFG, colleagues and

customers with volunteerism to

make a significant impact on thou-

sands of families in need. Charter

One in Michigan launched Summer

Vacation from Hunger, an initiative

to help fight the impact of child

hunger during the summer when

school ends and free or reduced-

price lunches are no longer available.

24 c o m m u n i t y i n v o l v e m e n t

Here are a few of the ways that

CFG supports financial literacy

across its footprint in New

England, the Mid-Atlantic and

the Midwest:

PENNSYLVANIA – Citizens Bank

of Pennsylvania partnered with

multiple organizations in 2008 to

provide financial literacy work-

shops to youth at risk, college

students, and low-income families

and individuals. In Pittsburgh,

24 financial literacy workshops

and 38 affordable housing seminars

were held with such partners as

HEARTH, Hosanna House, Junior

Achievement, NeighborWorks

and the Pennsylvania Bankers

Association. Bank colleagues in

the Philadelphia region hosted

financial literacy workshops for

more than 1,300 individuals.

Community partners included

The Enterprise Center, Jewish

Employment & Vocational Service

and the Career Wardrobe.

ILLINOIS – Charter One partnered

with the Chicago-based Center

for Economic Progress and Ladder

Up to provide direct on-site volun-

teer service at numerous tax

preparation sites to assist under-

served, low-income individuals

with free preparation of their

federal and state tax returns, as

well as to promote financial edu-

cation via one-on-one counseling.

Through these programs, more

than 41,400 low-income individu-

als and families were assisted

with free tax preparation services

in 2008, providing more than

$54.9 million in federal and state

tax returns – and savings exceed-

ing $10.2 million on tax prepara-

tion transaction fees.

MASSACHUSETTS – Citizens

Bank held 40 homebuyer educa-

tion classes and 25 small-business

seminars. It partnered with the

following groups to provide finan-

cial literacy seminars in low

income communities: Organiza-

tion of New Equality, International

Institute of Boston, Massachusetts

Individual Development Account

Program, Cambridge Housing

Financial Literacy

Assistance Fund, Citizens Housing

and Planning Association and

the Greater Boston Interfaith

Organization.

NEW HAMPSHIRE – Citizens

Bank held 35 “Basics for Banking”

seminars that reached low- and

moderate-income individuals,

recent immigrants and the elderly.

It also facilitated 15 first-time

homebuyer seminars. Addition-

ally, Citizens Bank has been a

funder of the statewide Individual

Development Account program,

which includes a financial educa-

tion component for participants.

Citizens Bank supported a variety

of organizations that provide

financial and credit services.

MONEYHELP – In preparation

for the 2009 launch of Money Help,

the U.S. version of RBS’s Money-

Sense program, Charter One in

Chicago hosted a training work-

shop to have branch managers

certified in the FDIC’s Money Smart

financial literacy curriculum. The

FDIC launched Money Smart, now

the standard financial literacy

curriculum of Citizens Financial

Group, in 2001 to serve as a

national financial-education cam-

paign. This comprehensive curricu-

lum is designed to help individuals

outside the financial mainstream

develop financial skills and posi-

tive banking relationships.

In an effort to develop the most

accurate picture of what financial

education should look like in the

future, CFG held a market focus

group to gauge consumers’ finance

needs and desire for additional

information. That focus group and

a survey of financial literacy pro-

grams in use across the footprint

were catalysts for developing a

new financial education Web site

that will provide individuals with

additional tools and resources

to help them with their personal

finance matters.

A counselor (left) at Neighbor-Works® Western Pennsylvania provides critical personal budget-ing information to a client. NeighborWorks provides financial literacy programs to more than 3,500 low- and moderate-income individuals annually.

25

FI NANC IAL R EVI EW

EXECUTIVE LEADERSH I P

AN D

BOAR DS OF DI R ECTORS

Citizens Financial Group, Inc. (“Citizens”) is a wholly owned subsidiary of

The Royal Bank of Scotland Group plc (“RBS”). Citizens’ results are included

in RBS’s financial reports under International Financial Reporting Standards

(“IFRS”). The information contained in the Chairman’s message is consistent

with RBS’s reporting practices, and thus includes only the US Retail and

Commercial Banking unit of Citizens. The information contained in the

Financial Review section is presented in accordance with United States

Generally Accepted Accounting Principles and includes Citizens Financial

Group in its entirety.

26

FI NANC IAL R EVI EW

H I G H L I G H T S

December 31(dollars in millions) 2008 2007 2006 2005 2004

Balance Sheet Data:Total assets $159,925 $159,940 $160,831 $157,335 $138,360 Investment securities 27,909 28,078 29,449 33,752 29,979Loans and leases: Consumer 53,701 55,125 54,921 54,135 46,440 Residential mortgage 15,283 18,222 18,433 17,427 13,588 Commercial and industrial 25,293 22,501 18,302 15,614 13,346 Commercial real estate 10,915 9,817 8,618 8,170 8,255 Lease financing 3,364 2,993 2,763 2,944 3,323 Credit card 2,475 2,404 2,569 2,514 2,079

Total loans and leases 111,031 111,062 105,606 100,804 87,031

Allowance for loan and lease losses 1,731 978 757 827 956Goodwill and other intangible assets 12,021 13,701 13,744 13,947 14,223Deposits 94,606 102,197 99,955 99,942 92,960Federal funds purchased, securities sold under agreements to repurchase and short-term borrowings 5,401 14,594 10,267 9,844 6,468Borrowed funds 34,926 17,555 24,451 23,149 13,600Stockholder’s equity 19,952 22,351 23,548 22,053 20,850

Years ended December 31 2008 2007 2006 2005 2004

Operating Data:Net interest income $4,035 $4,054 $3,950 $3,970 $2,983Provision for credit losses 1,932 683 331 239 238Provision for credit losses related to acquisition – – – – 74Noninterest income 2,108 2,132 2,024 1,918 1,172Noninterest expense 4,970 3,229 3,074 3,378 2,282Income (loss) before income taxes (759) 2,274 2,569 2,271 1,560Net income (loss) (930) 1,489 1,668 1,489 1,020Net income (loss) excluding acquisition costs, net of taxes (930) 1,500 1,696 1,717 1,088

Other Data:Return on average tangible assets* (0.62)% 1.02% 1.16% 1.28% 1.19%Return on average tangible common equity* (13.13) 18.23 22.92 29.36 36.37Net interest margin 2.84 2.82 2.83 3.14 3.46Allowance for loan and lease losses as a % of total loans and leases 1.56 0.88 0.72 0.82 1.10Allowance for loan and lease losses as a % of nonperforming loans and leases 154 154 217 246 364Nonperforming loans and leases as a % of total loans and leases 1.01 0.57 0.33 0.33 0.30Capital ratios Risk-based capital ratios: Tier 1 9.15 9.13 9.98 8.85 8.23 Total 11.22 10.97 11.80 10.83 10.61 Leverage ratio 6.96 6.91 7.30 6.33 5.95

*Return excludes acquisition costs, net of taxes

27

SummaryIn 2008, Citizens reported a net loss of $930 million, compared to net income in 2007 of $1,489 million. Included in 2008’s results was a goodwill impairment charge totalling $1,510 million pre-tax ($1,395 million after-tax). Excluding this non-cash expense, Citizens would have reported net income of $465 million. Furthermore, the charge has no effect on Citizens’ regulatory capital ratios.

In addition, the provision for credit losses increased from $683 in 2007 to $1,932 million in 2008. The additional provision for loan and lease losses reflects higher charge-offs and an increase in reserves for losses in the current uncer-tain economy. Financial ConditionTotal assets were $159.9 billion at Decem-ber 31, 2008 and December 31, 2007.

Loans and leases at December 31, 2008 were $111.0 billion compared to $111.1 billion at December 31, 2007. An increase in commercial loans of $4.3 billion was offset by a similar decline in consumer loans and residen-tial mortgages.

Goodwill and other intangible assets at December 31, 2008 and 2007 were $12.0 billion and $13.7 billion, respec-tively. The decline is due to the goodwill impairment charge and amortization of other intangible assets.

Total deposits at December 31, 2008 were $94.6 billion, compared with $102.2 billion at December 31, 2007. The overall decrease of $7.6 billion was due primarily to an $8.5 billion decrease in higher-cost term deposits, partially offset an increase in checking balances.

Capital Resources and LiquidityCitizens continues to maintain strong capital levels. At December 31, 2008, Citizens’ leverage and total risk-based capital ratios were 6.96% and 11.22%, respectively. Both measures are an improvement over 2007, which were 6.91% and 10.97%, respectively. Citizens was deemed “well capitalized” at December 31, 2008 and 2007, based upon regulatory definitions.

Liquidity at Citizens is maintained to provide reliable, stable and cost effec-tive sources of funding for asset growth and deposit fluctuations. Primary sources of liquidity are derived from growth in retail deposits, loan repayments and earnings. Additional sources of liquidity available to fund asset growth, include the sale or pledging of Citizens’ invest-ment portfolio, secured borrowings from the Federal Home Loan Bank and Federal Reserve Bank, and borrowings from RBS.

Asset Quality and the Allowance for Loan and Lease LossesNonperforming loans and leases totalled $1,125 million at December 31, 2008 compared to $636 million at December 31, 2007. Nonperforming loans and leases were 1.01% and 0.57% of total loans and leases at December 31, 2008 and 2007, respectively. Other real estate owned was $54 million at December 31, 2008, up $8 million from December 31, 2007. Total nonperform-ing assets as a percent of total assets were 0.73% and 0.43% at December 31, 2008 and 2007, respectively.

Citizens’ allowance for loan and lease losses was $1,731 million at December 31, 2008, compared to $978 million at December 31, 2007. The ratio of allowance to total loans and leases was 1.56% at December 31, 2008 compared to 0.88% at December 31, 2007. Net charge-offs were $1,175 million for the year ended December 31, 2008 compared to $520 million for the same period in 2007. For the year ended December 31, 2008, Citizens recorded provision for credit loss expense of $1,932 million compared to $683 million for the year ended December 31, 2007.

Results of OperationsNet loss was $930 million for the year ended December 31, 2008, compared to net income of $1,489 million for the year ended December 31, 2007.

Net interest income for the twelve-month period ended December 31, 2008 was $4,035 million, and was essentially flat compared to $4,054 million for the same period in 2007. Declining interest rates resulted in a reduction in both interest income and interest expense of approximately $1 billion. The net inter-est margin increased slightly to 2.84% for the year ended December 31, 2008 from 2.82% in 2007.

Non-interest income was $2,108 mil-lion for the year ended December 31, 2008 compared to $2,132 million for the same period in 2007, a decrease of $24 million. The decrease mainly resulted from the absence of gains reported in 2007, partially offset by increases in credit card fees, international fees and investment services revenue.

Non-interest expense was $4,970 mil-lion for the year ended December 31, 2008 compared to $3,229 million for the same period in 2007. The increase of $1,741 million resulted primarily from a non-cash goodwill impairment charge of $1,510 million. The remaining increase of $231 million is mainly the result of increases in salaries and employee ben-efits, and other operating expenses.

28

FI NANC IAL R EVI EW

C O N S O L I D A T E D S T A T E M E N T S O F O P E R A T I O N S

Years Ended December 31,(in millions) 2008 2007

Interest Income: Interest and fees on loans and leases: Consumer $3,114 $3,567 Commercial and industrial 1,343 1,523 Residential mortgage 952 1,008 Commercial real estate 514 637 Credit card 229 248 Loans held-for-sale 17 46 Investment securities 1,420 1,528 Federal funds sold and securities purchased under agreements to resell 1 93 Interest-bearing deposits 16 12

Total interest income 7,606 8,662

Interest Expense: Deposits 2,117 3,093 Federal funds purchased, securities sold under agreement to repurchase and short-term borrowings 574 527 Borrowed funds 880 988

Total interest expense 3,571 4,608 Net interest income 4,035 4,054 Provision for credit losses 1,932 683

Net interest income after provision for credit losses 2,103 3,371

Noninterest Income: Service charges on deposits 725 724 Credit card fees 408 380 ATM and debit card 296 286 International fees 118 88 Other net gains 110 228 Investment services revenue 85 70 Customer derivatives 68 61 Other service fee income 63 62 Bank-owned life insurance 51 53 Net gains on sales of securities available-for-sale 43 8 Mortgage banking 31 45 Trust income 31 28 Other income 79 99

Total noninterest income 2,108 2,132

Noninterest Expense: Salaries and employee benefits 1,588 1,488 Outside services 385 414 Equipment expense 353 318 Occupancy 328 311 Promotional expense 107 107 Goodwill impairment 1,510 — Amortization of intangibles 204 203 Acquisition costs — 18 Other operating expense 495 370

Total noninterest expense 4,970 3,229 Income (loss) before income taxes (759) 2,274 Provision for income taxes 171 785

Net Income (Loss) ($930) $1,489

29

C O N S O L I D A T E D B A L A N C E S H E E T S

December 31,(in millions, except share data) 2008 2007

Assets: Cash and due from banks $3,059 $2,282 Interest-bearing deposits in banks 197 231 Trading account assets 12 7 Securities available-for-sale, at fair value 26,520 26,880 Other investment securities 1,377 1,191 Loans held-for-sale, at lower of cost or fair value 138 614

Loans and leases 111,031 111,062 Less: Allowance for loan and lease losses 1,731 978

Net loans and leases 109,300 110,084

Goodwill 11,709 13,188 Other intangibles 312 513 Derivative assets 1,838 518 Deferred taxes, net 1,227 101 Premises and equipment 1,143 1,132 Bank-owned life insurance 1,134 1,095 Accrued interest receivable 671 955 Mortgage servicing rights 113 136 Federal, state and local income taxes receivable — 181 Other assets 1,175 832

Total Assets $159,925 $159,940

Liabilities And Stockholder’s Equity:Liabilities: Deposits $94,606 $102,197 Federal funds purchased, securities sold under agreements to repurchase, and short-term borrowings 5,401 14,594 Borrowed funds 34,926 17,555 Derivative liabilities 3,311 1,333 Federal, state and local income taxes payable 86 417 Other liabilities 1,643 1,493

Total Liabilities 139,973 137,589

Stockholder’s Equity: Preferred stock: $1.00 par value, 30,000 shares authorized, 15,850 shares issued and outstanding in 2008 and 2007 1,585 1,585 Common stock: $.01 par value, 5,000 shares authorized, 2,855 shares issued and outstanding in 2008 and 2007 — — Additional paid-in capital 15,223 15,223 Retained earnings 5,576 6,506 Accumulated other comprehensive loss (2,432) (963)

Total Stockholder’s Equity 19,952 22,351

Total Liabilities and Stockholder’s Equity $159,925 $159,940

FI NANC IAL R EVI EW

30

EXECUTIVE COMMITTEE*

Norman J. DeLucaHead of Global Transaction Services

Nick BalamaciHead of Corporate Affairs

Martin BischoffVice ChairmanConsumer and Business Banking

Ellen AlemanyChairman and Chief Executive Officer

James G. ConnollyPresident

Brad L. ConnerVice ChairmanConsumer Finance

Evelyn TressittChief Human Resources Officer

David BowermanHead of Manufacturing

Jay CookChief Risk Officer

John FawcettChief Financial Officer

Sheldon GoldfarbChief Legal Officer

* All members of the Executive Committee also serve on the Executive Leadership Group (p. 31)

31

EXECUTIVE LEADERSH I P GROU P*Our company’s senior management team:

David S. AndersonExecutive Vice PresidentController

Richard M. BarryPresidentConnecticut

Joel J. BrickmanGeneral Counsel and Secretary

Lucille A. Cavan Executive Vice PresidentHuman Resources – Consumer and Business Banking

Barbara S. CottamSenior Vice PresidentDirector of Public Affairs and Community Relations

Kenneth J. DeveauxSenior Vice PresidentGlobal Transaction Services

Joseph DewhirstGroup Executive Vice PresidentTreasurer

Cindy M. EricksonSenior Vice PresidentHuman Resources – Manufacturing

Daniel K. FitzpatrickPresident and Chief Executive OfficerEastern Pennsylvania, New Jersey and Delaware

James P. GaspoPresidentNew York

James J. GifasSenior Vice PresidentHead of GTS SolutionsGlobal Transaction Services

Michael J. GleasonExecutive Vice PresidentGovernment BankingCommercial Markets

Neil GrassieHead of Group Property

Edward O. Handy IIIPresident Commercial Real Estate Finance

Paul J. HanlonExecutive Vice PresidentHead of Technology ServicesManufacturing

Joseph A. HoffmanPresidentRBS CardsConsumer Finance

Paul J. HowardExecutive Vice PresidentChief Credit Officer

Risa KatzHead of Corporate Financial Planning and Analysis

James E. KivlehanExecutive Vice PresidentHead of Business Development and AnalyticsConsumer Finance

Bradford B. KoppGroup Executive Vice PresidentStrategy and Acquisitions

Daniel J. LandersPresidentRBS Business CapitalCommercial Finance

Mark Links RBS Head of Audit

Michael R. Lofgren Senior Vice PresidentChief Procurement OfficerManufacturing

Grant LyallHead of Operational Risk

Joseph J. MarcAurelePresident Rhode Island

Kenneth B. MartinExecutive Vice PresidentBusiness BankingConsumer and Business Banking

Robert D. Matthews Jr.Vice ChairmanCommercial Markets

Theresa M. McLaughlinGroup Executive Vice PresidentChief Marketing OfficerConsumer and Business Banking

Denise M. MenellyVice ChairmanManufacturing

Thomas M. MetzgerGroup Executive Vice PresidentChief Operating Officer – Risk

Michael MillardExecutive Vice PresidentDirector, CCO Investment ServicesConsumer and Business Banking

Tony MoscropHead of Operational Support and DevelopmentManufacturing

Joseph F. NemiaPresidentCommercial Finance

Christine NoelSenior Vice PresidentDirector of Public Affairs and Community RelationsU.S. Retail and Commercial

Ralph J. PapaChairmanPennsylvania

Marc A. PaulhusPresidentRBS Asset FinanceCommercial Finance

Sandra PiercePresident Michigan

Jay PlumPresidentHome Lending SolutionsConsumer Finance

Wahida PlummerPlanning and Administration Officer

Peter ReynoldsHead of Regulatory Risk

Joanna M. RobbinsSenior Vice PresidentHuman Resources – Global Transaction Services

Sean RowlesExecutive Vice PresidentChief Credit OfficerConsumer Finance and Business Banking

Cathleen A. SchmidtPresident New Hampshire and Vermont

* Also includes all members of the Executive Committee (p. 30)

Robert E. SmythPresident Massachusetts

Ian J. StewartExecutive Vice PresidentHuman Resources – Commercial and Consumer Finance

Ian StuttardPresident and Chief Executive OfficerRBS WorldPayGlobal Transaction Services

Scott C. SwansonPresidentIllinois

Maria TedescoGroup Executive Vice PresidentRetail BankingConsumer and Business Banking

Geoffrey C. ThomasExecutive Vice PresidentProduct MarketingConsumer and Business Banking

Hal R. TovinGroup Executive Vice PresidentRetail Partnership DeliveryConsumer and Business Banking

Kevin M. WalshSenior Vice PresidentSales DirectorConsumer Finance

Stephen R. WoodsExecutive Vice PresidentMid-Corporate BankingCommercial Markets

32

BOAR DS OF DI R ECTORS

Citizens Financial Group, Inc. and RBS Citizens, N.A.

Ellen AlemanyChairman and Chief Executive OfficerCitizens Financial Group, Inc. RBS Americas

James G. ConnollyPresidentCitizens Financial Group, Inc. RBS Citizens, N.A.

Edmond J. EnglishChief Executive OfficerBob’s Discount Furniture

William P. HankowskyChairman, President & CEOLiberty Property Trust

Charles J. (“Bud”) KochFormer Chairman, President & CEOCharter One Bank

Dr. Graham B. Spanier President The Pennsylvania State University

Shivan S. SubramaniamChairman and Chief Executive OfficerFM Global

Citizens Bank of Pennsylvania

Ralph J. PapaChairman

Daniel K. FitzpatrickPresident, Eastern Pennsylvania, New Jersey and Delaware

Dr. Kim L. AllenOwnerA Friend of the Family, Inc.

David W. CurtisExecutive Vice PresidentLeon N. Weiner & Associates, Inc.

Howard W. Hanna IIIChairmanHoward Hanna Real Estate Services

Stanley A. LowePresidentPittsburgh Neighborhood Preservation Services

Dian C. TaylorPresident and Chief Executive OfficerArtesian Water Company

Judith M. von Seldeneck Chairman and Chief Executive OfficerDiversified Search Ray & Berndtson

ADVISORY BOARDS

Rhode Island and Connecticut

Joseph J. MarcAurele‡President, Citizens Bank, Rhode Island

Richard M. Barry†President, Citizens Bank, Connecticut

Lawrence A. Aubin Sr.‡PresidentAubin Corporation

John J. BowenPresidentJohnson & Wales University

Dr. Robert L. CarothersPresidentUniversity of Rhode Island

Thomas J. CelonaPresidentThrifty Car Sales

Edward CrowleyPresident and Chief Operating OfficerDichello Distributors

David A. DuffyChairmanRhode Island Convention Center Authority

David M. HirschChairman and Chief Executive OfficerVertex Distribution

Lynn Fusco HughesPresidentFusco Corporation

Robert L. McCabeFormer Chairman, President and Chief Executive OfficerNarragansett Electric Company

Rev. Brian J. Shanley, O.P.‡ PresidentProvidence College

Dr. Lynda B. Smith

Massachusetts

Robert E. SmythPresident, Citizens Bank, Massachusetts

Rev. Dr. Ray HammondPastorBethel A.M.E. Church

Gary R. KanebChief Financial OfficerH.P. Hood LLC

John D. McClellanManaging DirectorThomas H. Lee Partners, LP

Clayton H.W. TurnbullPresidentThe Waldwin Group

New Hampshire

Cathleen A. SchmidtPresident, Citizens Bank, New Hampshire and Vermont

Michael J. GleasonExecutive Vice PresidentDirector of Government BankingRBS Citizens, N.A.

Stephen P. BarbaExecutive Director of University RelationsPlymouth State University

†Connecticut Advisory Board only‡Rhode Island Advisory Board only

Edit

or: K

en F

ran

cklin

g D

esig

n: G

ilber

t D

esig

n A

ssoc

iate

s, In

c.

Prin

cipa

l Pho

togr

aphe

r: D

avid

O’C

onn

or

Prin

ting

: Dyn

agra

f

RBS Asset Finance Senior Documentation Coordinator Katherine Dickenson; Brian Beechem, Director of Operational Taxes at FirstGroup America; Senior Vice President Max Haviland of RBS Asset Finance; and Michael Murray, CEO and President of FirstGroup America.

FirstGroup America

FirstGroup’s capital needs were

addressed through a $150 million

TRAC lease facility with RBS Asset

Finance serving as lead arranger

for syndicating various tranches

with multiple investors.

“Royal Bank of Scotland’s vision

and ability to see it through

provided us with an important

new source of liquidity during

challenging financial conditions,”

said Janet Neidhard, FirstGroup

America’s Treasurer. ”The team

approach to implementation

proved to be an effective strategy

as they guided us through the

details of each funding.”

As the leading provider of student

transportation in the United

States, FirstGroup America carries

approximately 3.3 million children

every day on its fleet of 45,000

yellow school buses. The company,

headquartered in Cincinnati, Ohio,

is a subsidiary of FirstGroup plc

located in Aberdeen, Scotland.

FirstGroup plc is the world’s leading

transport operator, servicing

more than 2.5 billion passengers

annually and is a long-standing

client of the RBS Group in the

United Kingdom. Its U.S.-based

division includes First Student,

First Transit, and Greyhound.

In October 2007, FirstGroup plc

completed the acquisition of

Laidlaw International, Inc.,

increasing the scope of its U.S.

operations and accelerating the

need for new capital investment

for the acquisition of new school

buses. RBS Asset Finance, work-

ing closely with RBS’s London

team, addressed FirstGroup’s

financing needs by outlining the

significant benefits of the U.S.

lease market, such as a good

source of term liquidity, low after-

tax funding cost, and the ability

to provide greater access to the

capital markets.

We would like to thank the following great customers, and thousands of others, for expanding their business with us over the past year. . .

$25,000,000 Interest-Rate Risk Management

on Floating Rate Line of Credit

– FOR –

$150,000,000 TRAC Lease Facility,

Lead Arranger

– FOR –

$7,000,000 Revolving Lines of Credit plus Cash Management, Deposit,

Commercial Card, Foreign Exchange and Investment Management Services

– FOR –

$145,500,000 Liquidity Facilities for

Lucas Oil Stadium completion and Indiana Convention Center expansion

– TO –

$25,000,000 Asset-Based Credit Facility plus

Cash Management Services

– FOR –

$9,850,000 Mortgage and Revolving Credit Facilities

– FOR –

Allard Nazarian Group d/b/a Granite State Manufacturing

$25,000,000 Line of Credit plus Cash Management,

Commercial Card, Deposit, Equipment Leasing and

Merchant Card Processing Services

– FOR –

$35,000,000 Credit Facilities plus Deposit and Interest-Rate Risk Management Services

– TO –

Depository and

Cash Management Services

– FOR –

Credit Facilities and

Syndication Agent

– FOR –

$7,400,000 Credit Facilities plus Cash Management,

Deposit and Interest-Rate Risk Management Services

– FOR –

$100,000,000 Credit Facility, Agent and Lead Bank, plus Cash Management, Deposit, Global Trade and Interest Rate Protection Services

– FOR –

$30,000,000 Secured Line of Credit plus

Cash Management, Deposit, Foreign Exchange and

Merchant Processing Services

– FOR –

$20,000,000 Credit Facilities plus

Cash Management, Merchant Services and Commercial Card Services

– FOR –

$25,000,000 Credit Facilities plus

U.S. Cash Management Services

– FOR –

Aegis Media Americas

$100,000,000 Letter of Credit

– FOR –

$36,500,000 Credit Facilities, plus Cash Management, Deposit, Interest-Rate Risk Management

and Trade Services

– FOR –

Genesis Worldwide II d/b/a

$275,000,000 Acquisition Credit Facility,

Agent and Lead Bank, plus Cash Management Services

– FOR –

$250,000,000 Credit Facilities plus

Cash Management, Deposit and

Foreign Exchange Services

– FOR –

$18,400,000 Letter of Credit and Interest-Rate Swap

for tax-exempt bond transaction to fund new athletic center and other improvements at

Credit Facility, agent,

plus Interest-Rate

Risk Management Services

– FOR –

$54,200,000 Construction Loan, Agent and Lead Bank, for Parc Huron luxury apartment tower

plus Deposit and Interest-Rate Risk Management Services

– TO –

$6,000,000 Credit Facilities and Acquisition Financing

plus Cash Management and Corporate Credit Card Services

– FOR –

$32,000,000 Line of Credit for Working Capital and

Term Financing plus Cash Management, Foreign Exchange, Interest-Rate Risk

Management and Lease Financing Services

– FOR –

$11,500,000 Lines of Credit plus

Cash Management and Interest-Rate Risk Management Services

– FOR –

$6,862,000 Credit Facilities plus

Interest Rate Risk Management Services

– FOR –

The ENT Center of Rhode Island, LLC

$3,225,000 Construction Loan for

Cold-Storage Warehouse

– FOR –

Working Capital Facility plus Cash Management,

Deposit and Foreign Exchange Services

– TO –

$8,250,000 Letter of Credit for Bond Financing

– FOR –

$80,000,000 Acquisition Credit Facility, Agent and Lead Bank, plus

Cash Management, Deposit and Interest-Rate Risk Management Services

– FOR –

Citizens Financial Group’s Annual Report is printed on Environment®

Paper. This 100 percent recycled paper reduces solid waste disposal and lessens landfill dependency. By utilizing this paper:

• 300 trees were preserved for the future.

• 212,520,400 BTUs of energy were conserved.

• 866 pounds of waterborne waste were not created.

• 14,101 pounds of solid waste were not generated.

• 127,450 gallons of wastewater flow were saved.

• 27,765 net pounds of greenhouse gases were prevented from forming.

One Citizens PlazaProvidence, Rhode Island02903

Our Credo Customers Treat the customer the way we would enjoy being treated all the time.

Colleagues Do what it takes to make our company the best place to work in the world.

Community Show that we care deeply about the community and the environment. Conduct ourselves ethically at all times as we deliver for our shareholders.

*See the full Credo on p. 19.

CFG

20

08