Broker snap: Nomura prefers Lloyds to RBS

There was nothing in the full year results from Royal Bank of Scotland (RBS) to persuade Nomura Securities to abandon its preference for fellow part-nationalised lender Lloyds Banking.The Japanese broker reiterated its 'reduce' recommendation on Royal Bank of Scotland after the figures came in much as Nomura expected. While the fourth quarter results were 'in line' at the headline levels, with some signs of progress around disposals and deposit gathering, core business profitability remains challenged, according to Nomura. "We continue to believe that normalised returns are unlikely to exceed high single digits, which requires the group to improve core business profitability, excluding impairments, by over 50% to meet its target of at least 15% by 2013."Nomura has a preference for Lloyds, which it says remains more geared to retail and commercial banking operations in the UK.Nomura has a target price for RBS of 41p.