Fitch Assigns 'A-/F1' Long- and Short-Term IDRs to RBS Securities Inc.

Fitch Ratings assigned an 'A-' long-term Issuer Default Rating (IDR) and 'F1' short-term IDR to RBS Securities Inc. (RBSSI). RBSSI is a wholly owned indirect subsidiary of The Royal Bank of Scotland Group plc (RBS Group) which is rated by Fitch at 'A/F1'. The Rating Outlook is Stable. This is the first time Fitch has rated RBSSI. See the full list of ratings at the end of this release.

Core to Fitch's assessment of RBSSI is its importance to The Royal Bank of Scotland plc's (RBS) Global Banking and Markets (GBM) segment. Fitch views RBSSI as a core business within RBS and a significant earnings contributor to the overall group. As such, Fitch believes the ratings are closely linked.

Fitch also notes that the firm relies on the parent for contingent funding, capital and liquidity needs and without such support, the rating would be significantly lower on a stand-alone basis, though the agency recognizes that it is operated within GBM holistically and not on a legal entity basis.

RBSSI is heavily reliant on short-term, wholesale secured financing, which the agency views as a credit negative. That said, Fitch notes the liquid nature of the balance sheet and improvements the firm has made in its risk management infrastructure. In addition, the firm's revenues are heavily concentrated in trading in one asset class, which also places further pressure on the firm's credit profile.

Fitch believes RBSSI's franchise is more limited than many of the diversified broker dealer peers in the United States. The current ratings incorporate RBS's continuing demonstrated support in the form of capital infusions and additional liquidity. In addition, the ratings of RBSSI rely on some level of UK government support because the ultimate parent's viability ratings are lower than the current long- and short-term IDRs. The assignment of the 'F1' short-term IDR reflects Fitch's view that any support if needed would be forthcoming in the short term.

RBSSI's long-term rating is notched down from the group's rating because the entity is a foreign subsidiary and support may diminish over time. Fitch believes that the UK government will continue to allow support of RBSSI, but that bank subsidiaries will have priority in support in an extreme stress scenario. Furthermore, over time, the UK government may separate investment banking from core banking activities, which may reduce support over time and may cause Fitch to revisit the ratings.

RBSSI is a top-tier MBS and ABS trading firm. Its other areas of strength include the firm's debt capital markets business and rates business. The firm is a primary dealer and active market maker in U.S. Treasuries, Agencies, and TIPs. The firm also benefits from being part of a global bank that generates additional business for its franchise from clients seeking to trade U.S. dollar assets.

RBSSI is one of two principal operating companies for GBM in North America. The firm was founded in 1981 as Greenwich Capital Markets. It has been a primary dealer of U.S. Government securities since 1984. In addition to being an SEC registered broker dealer, it is also a CFTC designated Futures Commission Merchant (FCM). It is also an agent for the Federal Reserve Term Asset-Backed Securities Loan Facility (TALF).

Primary business lines include mortgage and ABS Sales and Trading, Credit and Market Sales and Trading, Short Term Markets and Financing, Rates Sales and Trading, Emerging Markets, and Equities. The firm had $137 billion in total assets as of June 30, 2011.

Fitch has assigned the following ratings to RBS Securities Inc.:

--Long-term IDR at 'A-';

--Short-term IDR at 'F1'.

The Rating Outlook is Stable.

Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Aug. 16, 2011);

--'Securities Firms Criteria' (Aug. 16, 2011);

--'Parent and Subsidiary Rating Linkage' (Aug. 12, 2011).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=649171

Securities Firms Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=649173

Parent and Subsidiary Rating Linkage

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=647210

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