PEOPLE'S BANK AGREES TO SELL CREDIT CARD BUSINESS TO THE ROYAL BANK OF SCOTLAND GROUP TO FOCUS ON PROFITABLE CORE BANKING FRANCHISE RBS to maintain credit card employee base in Bridgeport BRIDGEPORT, CONN., - People's Bank (NASDAQ: PBCT), a $12 billion financial services company and the largest independent state-chartered institution in Connecticut, today announced an agreement to sell its credit card business, including transfer of its related Bridgeport credit card operations and staff, to The Royal Bank of Scotland Group (RBS). People's will obtain a 15.5% premium on the credit card receivables sold in the transaction. At December 31, 2003, the total amount of People's managed credit card receivables was approximately $2.3 billion. "The strategic decision to exit the credit card business strengthens People's and better enables us to focus on our core retail and commercial banking businesses where we have proven competencies and demonstrated competitive advantages," said John A. Klein, People's president and chief executive officer. "We believe that the time is right to transfer the business to an institution that can optimize its performance and grow it to a multiple of its current size," he said. "RBS, with one of the largest credit card platforms in Europe, is such an institution." "We are particularly pleased that RBS will maintain our credit card business employment base in Bridgeport," Mr. Klein said. "The ability to preserve and grow the business was certainly an important factor in our decision to sell the business to RBS," he said. "We deeply appreciate the efforts of our employees to strengthen the credit card business. Over the past two years, our credit card team has worked hard to restore the business to profitability by significantly improving asset quality and our overall effectiveness," Mr. Klein said. "People's is Connecticut's bank and has been for 162 years. We will continue our leadership and commitment to the state and its communities - especially in our hometown. At the same time, we welcome RBS as a major new corporate citizen contributing to Bridgeport's economic development," he concluded. The transaction is expected to close in the first quarter of 2004 subject to receipt of customary regulatory approvals. People's is a leader in Connecticut retail and commercial banking. The bank was one of the first in the nation to establish a presence in supermarket banking and has 64 of its 154 branches located in Super Stop & Shop stores with seven-day banking across Connecticut. Supermarket branch deposits totaled $1.8 billion at year-end 2003. The bank grew retail non-interest bearing deposits at an 11 percent rate and commercial non-interest bearing deposits at 13 percent in 2003. It also continued to build strong commercial and consumer lending businesses based on its recognized brand, strong relationships and local decision-making. Average commercial banking loans grew $204 million in 2003, or 8 percent, and Connecticut home equity lending grew $110 million, or nearly 20 percent, during the year. People's has been the number one residential mortgage lender in the state for the past eleven years, closing over $3 billion in mortgages in 2003. link: http://www.peoples.com/im/cda/press_room/1,,13224,00.html Ron.
