* RBS in talks with BoE, government over Scotland
* CEO calls for "calm" ahead of independence vote
* Further branch closures 'inevitable' - Chairman
* Branch network has become too expensive - Chairman
* 99.8 percent approve bank's pay play
(Adds comments from chief executive, chairman)
By Matt Scuffham
EDINBURGH, June 25 Royal Bank of Scotland
is consulting with lawmakers and considering its options
should Scotland vote for independence in September, Chairman
Philip Hampton told shareholders at its annual meeting on
Hampton said the impending vote had created a great deal of
uncertainty and would have implications for the bank's credit
rating, taxes and regulation.
"We are having to consider the possible business
implications of a 'Yes' vote and our response. We maintain a
continuous dialogue with the Bank of England, the UK government
and the Scottish government on these matters," he said.
Scotland will hold a referendum to decide whether to end its
307-year union with England on September 18. The latest YouGov
poll showed that the "No" campaign had extended its lead over
the pro-independence "Yes" campaign to 17 points, bucking a
recent trend of surveys that have shown rising support for the
nationalists in recent months.
The future of RBS, which employs 12,000 in Scotland where
the financial services industry accounts for 7 percent of
economic output, has become a key part of the independence
Business Secretary Vince Cable has said it is inevitable
RBS, which received a 45 billion pound ($76 billion) government
bailout during the 2008 financial crisis, will move its
headquarters from Edinburgh to London in the event of
independence because of the greater stability offered by
Britain's established financial system and regulation.
"We're looking at what could happen and how we can maintain
a stable bank," Cable said.
Scotland's First Minister Alex Salmond hopes Scotland will
officially become independent in March 2016, giving Scottish
based banks RBS and Lloyds Banking Group 18 months to
assess their options.
Scottish nationalists are basing their economic plans on
keeping the pound by creating a currency union, but Britain sees
that as a highly unlikely outcome
The British government has said there is no clear economic
rationale for a currency union and warned that such an
arrangement could create financial problems similar to those
suffered by the euro zone.
Hampton told RBS shareholders that the Bank of England would
continue to be the lender of last resort for the bank during the
period of transition.
Hampton also told the meeting it was inevitable the bank
would close more branches following a 30 percent decline in
branch transactions over the past three years and a 230 percent
rise in online and mobile transactions.
Hampton said, there was no floor, or minimum number, set for
the number of branches which RBS needed to keep.
"The branch network is just becoming too expensive. It will
match the customer requirements. If customers are not going into
branches we will have to review why they are there," he told
Reuters after the meeting.
RBS, which currently has about 1,900 branches, said in April
that it would close 44 branches and is also selling more than
300 branches as a condition of receiving state aid during the
2008 financial crisis.
McEwan told Reuters after the meeting that the industry
needed to redefine the role of the branch.
"We've got to rebuild what the branch is about. What is it
for? It's becoming less and less transactional, which used to be
most of what it's about and now it's becoming more advisory and
a place people go to have issues resolved," he said.
Shareholders owning 99.8 percent of the shares, including UK
Financial Investments, which manages the government's 81 percent
stake, voted in favour of the bank's pay policies.
($1 = 0.5889 British Pounds)
(Reporting by Matt Scuffham; Editing by Steve Slater and Elaine