Financial Trading Blog
Stock of the day 02/08/2016 – Royal Bank of Scotland Group PLC
The decline RBS saw at the end of 2015 has only accelerated since the New Year began. By the middle of February the stock had plunged from an opening price of £2.99 to £2.20, a low it bested at the start of April as it hit £2.04. From then RBS bounced rather aggressively between £2.20 and £2.60 before the Brexit referendum results put an end to that trading bracket, the 40% drop leaving the bank at £1.49. Royal Bank of Scotland now sits at a current trading price of £1.84 (IT-Finance.com, 02/08/2016).
(Source: IT-Finance.com 02/08/2016)
Both of the bank’s updates this year have been received poorly by investors. Its annual figures at the end of February saw RBS reveal its 8th consecutive full year loss, of £1.98 billion, while its first quarter figures in April saw things get even worse, the bank posting a £968 billion loss due to a one-off dividend payment of £1.2 billion to the UK government. The sour cherry on top came more recently, as the latest round of European banking stress tests showed that RBS would be the third worst-affected institution of the 51 surveyed.
In terms of RBS’ report on Friday analysts are expecting underlying pre-tax profits of £1.016 billion and total income of £3.15 billion for the second quarter. However RBS is still forecast to reveal a loss of anywhere between £247 million and £580 million for the same period, this coming on top of the aforementioned near-£1 billion loss it posted in the first quarter. RBS will also be the first institution to report following the Bank of England’s ‘Super Thursday’, so investors will be expecting some kind of comment on the impact of the likely lowered interest rates.
Royal Bank of Scotland Group PLC has a consensus rating of ‘Hold’ with an average target price of £2.48.
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