Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Not greek, but german :
DEUTSCHE BANK CUTS ROYAL BANK OF SCOTLAND PRICE TARGET TO 300 (318) PENCE - 'BUY'
Better news from UK :
BARCLAYS RAISES RBS PRICE TARGET TO 340 (330) PENCE - 'OVERWEIGHT'
I called this a few days ago and I think it will fall a bit further I'm surprised it's not in the 100.0's. In the long term I do see value here but I just don't like how RBS suspected a drop so they put out a quick div to buff the fall, it was a bit slimey.
Jabh - thx for pointing out divi/buyback forecast is in powerpoint on RBS Results centre rather than part of Q3, where link to Results Centre is included in Q3 announcement. I had missed the link.
I think "no buy back or special dividend in sight" is perhaps a bit strong.
The results pack does forecast total DPS (ordinary + special) for 2018 at 7p then 13p in 2019; 18p in 2020; and 21p in 2021.
It also forecasts £936m share buyback in 2019; £1027m in 2020, and £875m in 2021.
Consider the Government will also be selling £3bn stake per year over the next 5 years, so full privatisation also well in sight. A great time to stock up and hold I think. :-)
NIM reduced a bit because they are aggressively going for more business(income)?
Income increased 15.4%, but the all important NIMs dropped again to 1.93% from 2.12% last year hence the drop in the share price.
RBS need to fix the problems with their Net Interest Margins or earnings are likely to come under further considerable pressure in the future causing a serious impediment for the bank's profitability.
Profits up but not meeting forecasts, now got impairments for Brexit rather than PPI/conduct, no buyback or special dividend in sight. Surprised sp is not swimming like a brick - only 5% down so far.
Profits up... SP down lol
Improving asset quality and stable NIMs will be at the front of investor's minds tomorrow, and will be the crucial key performance drivers for a forward going future share price, and the eventual return of the Bank to full private ownership again.
Thanks for your thoughtful post.
You might be right about Brexit concern being a factor depressing the sp but I note the correlation between the RBS sp and the FTSE generally since the end of September. I suspect that the range of geopolitical factors that has pushed the index downwards since then has had the most significant effect on the RBS sp, rather than anything inherently specific to RBS itself. Additionally, you can see similar trajectories in sector peers LLOY and BARC and more broadly, FTSE companies like TSCO, LGEN or VOD all exhibit a similar pattern from on or around 24 Sep.
I discount your point about challengers although I agree about the increasing significance of small fintec operators. UK banking customers are for the most part, resistant to switching, probably because the products offered by banks differ only marginally, and I don’t rate the threat as highly as you have.
It is my view that once markets across the globe regain their confidence we will see a commensurate rise in the RBS sp. With regard to Brexit, I think we’ll see the opposite of what appears to be intuitive; come 29 Mar, if the UK successfully leaves the EU with or without a deal, much of the uncertainty about the economy will be removed. The uncertainty factor (so far as the stock market is concerned) is not related to the direct impacts on the economy per se, but about businesses not knowing what their investment decisions ought to be, and after 29 Mar, things will be much clearer and the FTSE will experience a positive jolt as the market decides on the companies and sectors in which it will invest its massive stockpiles of cash. The irony of my view is that an extension of the article 50 period or any delay in leaving will increase the uncertainty and depress the FTSE.
230 or 220 ? Assuming good or neutral Brexit outcome - this should rebound :
"Banks have been hit much harder than the rest of the FTSE 350, which is down around 8% in the same period.
Confidence in UK domestic lenders, currently trading on just 7-7.5 times earnings estimates for 2019, is mostly weak due to Brexit fears, said Lee Wild, head of equity strategy at Interactive Investor.
"UK interest rates have risen slightly, which is normally good for bank sector margins as lenders typically increase the cost of mortgages and loans more than savings rates," he said. "But borrowing costs remain at historically low levels, and any downturn in the economy - possibly triggered by a messy Brexit - could negatively impact on demand for bank products."
If this closes at 230.0 today I think we might see a drop to 220.0, if it goes past 220.0 your guess is as good as mine...
I have to say, I think I-1986 is quite right. There are so many positives to be said for RBS and so the macro-economic concern arising from Brexit is really the only issue that can explain why the SP is at an 18 month low right now and falling. I do wonder whether reporting on a 'brexit extension' since 12th October is partly responsible for the notable deterioration from 249 to 235 between then and now.
There is one other issue facing the Bank which is around the potential threat posed to RBS' market dominance by high-tech start ups. Fintech firms are newly enabled by PSD2 regulation (open banking). However, the bank is doing well at keeping pace with challengers (for example, Bo has been reported in the media, as has its use of AI, acquisition of FreeAgent, launch of Esme and Entrepreneur Accelerator).
The government's 7.7% stake sale also appeared to have a downward pressure on the SP and that has to be repeated every year now for the next 5 years. On the plus side, major investors obviously thought that purchasing £2.6bn worth of shares at 271p was a good investment which should be of some comfort to the rest of us given the current SP.
So I do think the SP will continue to dive in spite of all of RBS' fantastic prospects. But I also think that this means that between now and Q3 2019 is a great time to keep buying the stock. So long as Brexit doesn't actually put the British economy into a spin after 29th March 2019, the investment case for RBS will be at its strongest in more than 10 years and unfettered, as it has been, by legacy issues and macro uncertainty.
I-1986: do you have any substance to your assertion or is it just a hunch? This board gets lots of posters who make this kind of statement and to be honest, given the historically mercurial nature of the share price and the difficulty in uderstanding the reasons for its perennial fluctuations, your assertion is lazy and practically useless.
For a long time the sp has tended to oscilate over a particular price range. In 2013-14, the range was 320- 370; lately it's probably 240- 255. I think that results for the next few quarters are likely to be more consistent and encouraging than they have been for a long time and there will be improvements in the dividend, both of which will provide impetus to the sp. What will prompt your 'dive'?
Additionally, I think we'll see at least one more rate rise before Mar 2019, which will add support to the SP. Despite concerns about the impact of Brexit, the figures proffered for nominal wages growth and unemployment are positive, which improves the argument for another rate rise. Additionally, the BoE has to start considering the 'normalisation' of interest rates; it needs to raise the rate to a level that gives it some flexibility to deal with a sudden shock (like Brexit). I think the rate rises we've seen in the US are signifiers of this concern rather than any attempt to dampen a runaway economy.
I fear you may be right. I think RBS knew this and that is why they were so eager to get the DIV in place and the "buy back" news before the end of the year. That said I do think its got potential but I still think you can wait a bit longer before topping up.
This share will dive until Brexit is concluded. Hold your horses and don't sprint to soon
Mine came today or yesterdsy
I am in
anyone know a online calculator to work out average share price
if one buys more shares in sterling.
My two pennyworth - many articles in press mentioning today's 2p divi payment (first for 10 years). Interestingly, further confirmation or earlier news "Even after Friday's payment, the bank has excess capital which it plans to return to investors, possibly via a special dividend or share buy back". So it is looking good, one way or the other ...
May enter tmrw
Bulent, did you get the 'big day' you hoped for?
Bulent74. Opened for trading today, not much interest from investors, still operating at a loss of £16.3 million up from £13.2 million a year ago.
Big day Monday
I think I'm with Stagecoach here. I think there are lots of barriers to the sheer chutzpah of considering a special dividend. This bank hardly qualifies as a national treasure, and given that the vector of media narrative about the bailout tends to be resigned acceptance that the £45bn will not be recouped by the tax payer, I can't see how the idea of a (big) special payout to investors will fly in the media. Granted, there are lots of small investors including RBS employees who have had their holdings smashed by the event s of the last decade but even that group is not substantial enough to justify what will be perceived as yet another filip to the wealthy, and another kick in the face of the general populace, who see themselves as having footed the bill for the 'crimes' of bankers.