RBS to Head South if Scotland Quits the UK
A week ahead of the referendum on whether Scotland will break away from the United Kingdom (UK), Royal Bank of Scotland (RBS) said it will shift its head office south of the border if voters back independence.
The announcement followed news that Lloyds Bank would also move its head office to England in the event of a ‘yes’ vote on 18 September. There had been mounting expectations that the banks would shift their registered offices south to seek the protection of the Bank of England (BoE) and reassure both customers and the credit ratings agencies (CRAs).
A statement issued by RBS read: “As set out in the risk disclosures in RBS’s annual report, there are a number of material uncertainties arising from the Scottish referendum vote which could have a bearing on the bank’s credit ratings, and the fiscal, monetary, legal and regulatory landscape to which it is subject.
“For this reason, RBS has undertaken contingency planning for the possible business implications of a yes vote. RBS believes that this is the responsible and prudent thing to do and something that its customers, staff and shareholders would expect it to do.
“As part of such contingency planning, RBS believes that it would be necessary to re-domicile the bank’s holding company and its primary rated operating entity (The Royal Bank of Scotland plc) to England. In the event of a yes vote, the decision to re-domicile should have no impact on everyday banking services used by our customers throughout the British Isles.
“However, RBS believes that it would be the most effective way to provide clarity to all our stakeholders and mitigate the risks previously identified in our annual report.”
Separately, Lloyds, which owns Bank of Scotland (BoS) and is 25% owned by UK taxpayers, said that its contingency arrangements in the event of a yes vote were likely to involve moving its registered office from Scotland, where its Halifax Bank of Scotland business is registered.
“While the scale of potential change is currently unclear, we have contingency plans in place which include the establishment of new legal entities in England,” the bank announced. “This is a legal procedure and there would be no immediate changes or issues which could affect our business or our customers.”