Royal Bank puts #29m in 2000 kitty

The Royal Bank of Scotland disclosed last week that it has set aside #29 million to pay for its millennium systems upgrade, writes Dan Sabbagh.

Both the relatively low cost and the decision by the bank to take a specific charge in its company accounts has surprised the industry.

But the bank is clear about its reasons for coming forward. A representative said: 'We're taking a charge now because we know exactly how much it will cost, and that shows shareholders the true picture.'

Year 2000 spending amounted to #7 million in the year ended 30 September. The remaining #22 million will be spread over the lifetime of the project.

Ian Hugo - a member of Taskforce 2000's executive - described the bank's figure as 'low'.

Other banks have gone public with considerably higher costs for year 2000 projects. Both NatWest and Lloyds TSB have said they expect to spend #100 million.

Hugo added: 'I've heard public declarations and I've known the real costs, and the real costs are between a third and a half greater.'

t depends on how you account for these costs - and in reality that's a matter of producing a politically acceptable figure.'

The Royal Bank is also one the UK's first companies to take a specific charge against the millennium. Up to now companies have said they would meet the expense as part of ongoing operating costs.