Today Royal Bank of Scotland Group Plc confirmed that its headquarters would be relocated in England in case the Scottish independence referendum next week ends up with a positive vote. A similar announcement was made by Lloyds Banking Group yesterday.
The bank, which is 80%-government owned, made a stock exchange statement, which was cited by the Financial Times, saying that as part of its 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”.
The annual report of RBS spoke of “material uncertainties” that could hurt its credit rating in case of a positive vote, including “fiscal, monetary, legal and regulatory” change.
Lloyds, which is 25%-owned by the government of the U.K., made a statement yesterday and shared that it would move its legal headquarters from Edinburgh to London in case of a “yes” vote for Scottish independence. The bank said in a statement cited by the Wall Street Journal: “While the scale of potential change is currently unclear, we have contingency plans in place which include the establishment of new principal legal entities in England.”
Both RBS and Lloyds received a government bailout six years ago. They are currently the two largest banks in Scotland.
The decreasing presence of both RBS and Lloyds, along with some other of the leading financial groups that are also considering relocating some of its operations in case of a “Yes” vote, could turn out to be a heavy blow, given the importance of this sector for the Scottish economy.
Royal Bank of Scotland Group Plc added 1.34% to trade at GBX346.80 per share at 12:36 GMT in London, marking a one year change of -2.86%. The lender is valued at £39.08 billion. According to the Financial Times, the 25 analysts offering 12-month price targets for Royal Bank of Scotland Group Plc have a median target of £3.50, with a high estimate of £4.60 and a low estimate of £2.50. The median estimate represents a 2.28% increase from the previous close of £3.42.
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