Royal Bank Of Scotland Share Discussion Threads

[smurfy2001] 10/5/2018 08:09

AMAZING NEWS !!!

I can finally relax with my holding here!

ISA position @ 274.68 nicely in profit this morning.

I'm betting a dividend is a cert this year.

[chinese investor] 10/5/2018 08:06

Next few months are going to be good !

[leedskier] 10/5/2018 08:05

opens plus 6%

[raffles the gentleman thug] 10/5/2018 07:34

Good observation bluster - that was probably reason LLOY didn't tender

[blusteradjuster] 10/5/2018 07:27

One potential issue with a direct tender could be media/opposition-politicians crying foul of RBS “ripping off” taxpayers buying shares below HMG’s cost price.

Solution to that would be for HMG to sell to the market and RBS to buy from the market - removing the direct link.

The overall effect is the same - other than Mr Market will cream off a % !!

[raffles the gentleman thug] 10/5/2018 07:18

RBS conforming new fully diluted tangible book of 274p and proforma CET1 of 15.1% at Q1 and maintains target CET1 of 14%

[chinese investor] 10/5/2018 07:17

300p Soon !

[raffles the gentleman thug] 10/5/2018 07:11

I agree bluster they should be buying back shares. The actual pension settlement required an additional £1.5bn to be paid from 2020 so in the short term they can address the capital position without the immediate requirement for additional contributions. So I probably would expect a dividend and a buyback programme as they will probably want to see any dividend payments as progressive and sustainable going forward rather than lumpy.But yeah you are spot on, with the equity at book value and the bank derisked they should be buying shares and/or tendering for the governments shares

[polar fox] 10/5/2018 07:09

Last Monday's dividend consensus was 5.41p for this year, down from 5.57p a week earlier. It will be interesting to see how it changes!

[blusteradjuster] 10/5/2018 07:05

Of course, LLOY carry out buybacks ... and then hand oodles of new shares to mgmt.

Perhaps the fat cats have learnt nothing.

[blusteradjuster] 10/5/2018 07:03

Raffles,

Are buybacks excluded from that £500m figure?

Any bank trading so close to book should consider its own equity a good investment.

[raffles the gentleman thug] 10/5/2018 07:01

and when considering dividend payments one should not only consider the large surplus capital RBS now has but also the fact that adjusted earnings last year were 25.2p a share. This gives an idea of the sustainable level of payout the company should be aspiring to make

[raffles the gentleman thug] 10/5/2018 06:55

Impact on CET1 is about 50bp from DoJ settlement reducing it from 16.4% to 15.9% (expect clarification this morning) and then we have the 80bp hit to come in 2H 2018 (you quite right polar) from the pension agreement reducing it to 15.1%, but obviously the final outcome will be better because of three quarters of retained underlying profits.So in short looks like they will have something like 130/140bp of excess capital this year assuming the business is run the same as LLOY with a 100bp buffer over the 13% requirement. Which means they are in super shape to commence dividend payments - albeit up to £500m whatever they payout needs to be matched against pension contributions for the next three years.

[tfergi] 10/5/2018 06:54

This is excellent IMORBS should still turn a profit this year as it only needs circa £1 billion over what has been set aside.Not much more than one quarters profit !!RBS has already said its buffer will still be around 15% after the fine - fantastic All things considered we couldn't have hoped for much better. Only $1.3 billion over what has been set aside.Onwards and upwards now

[polar fox] 10/5/2018 06:51

Before RNS time, the FTSE is up about 15pts on IG, compared with yesterday's close.

[leedskier] 10/5/2018 06:51

David Buik
‏
@truemagic68

CORE SPREADS - European opening calls suggest a reserved air of confidence, with UK awaiting MPC meeting with FTSE oil stocks maybe stepping forward - FTSE 7678 up 19, DAX 12997 up 46, CAC 5548 up 16, DJIA futures 24577 +31 at 6.30am

[leedskier] 10/5/2018 06:51

Excellent news.

[polar fox] 10/5/2018 06:37

Thoroughly agree. Btw, the pension hit is supposed to be H2, rather than Q2.

[blusteradjuster] 10/5/2018 06:36

What would it do to their CET scores?

Had always assumed they’d offer HMG some of their capital buffers to tender for blocks of shares (for cancellation) at a (politically acceptable) premium.

[polar fox] 10/5/2018 06:12

Great news indeed, Raffles, and your math looks very solid to me.

When I bought these, just over 18 months ago, I had in mind a chart target around 350-360p, about double my cost. Over time, I think the door could now be open towards that. Hopefully, there will be an RNS later or very shortly.

[mr roper] 10/5/2018 06:02

hxxps://www.investing.com/news/stock-market-news/us-rbs-reach-settlement-in-principle-over-mortgagebacked-securities-1440013

[raffles the gentleman thug] 10/5/2018 04:37

So just to get that in perspective that's only an 8.7p hit to tangible book value, which having already been hit by the pension charges to come in Q2 by 12p means new fully diluted book value will come down from its current 295p to 274.3p.Given the bank is already making a 9.3% return on tangible book, and has no more legacy issues I would expect the shares to be worth at least a 10% premium to tangible book or at least 300p a share - Lloyds which is making an underlying 15.4% return has consistently been worth between a 25% to 35% premium to book.Only thing holding the share price back now is the impending start of the Government share sale, but given the world is underweight this name they'll have no problem getting that away.

[raffles the gentleman thug] 10/5/2018 04:17

EXCELLENT NEWS FOLKS ...Royal Bank of Scotland has agreed a $4.9bn settlement with the US Department of Justice that clears the way for the British government to sell more shares in the bank.The civil settlement, which RBS said on Wednesday night had been agreed in principle, is lower than many analysts had feared and the bank said $3.46bn of it would be covered by provisions it has already taken. The bank, which was bailed out by the UK taxpayer after the 2008 financial crisis, has had the prospect of a heavy fine by US authorities hanging over it for years and making the government reluctant to sell more shares. Philip Hammond, the chancellor, promised last year to sell a stake of up to £3bn in RBS by March 2019. But he had been reluctant to sell shares while the large DoJ fine was still hanging over the bank.The government could sell a small part of its RBS stake, on which the taxpayer is sitting on heavy losses, before the summer, according to one person briefed on the thinking of Treasury officials."Today's announcement is a milestone moment for the bank," said Ross McEwan, chief executive of RBS. "Reaching this settlement in principle with the US Department of Justice will, when finalised, allow us to deal with this significant remaining legacy issue and is the price we have to pay for the global ambitions pursued by this bank before the crisis.""Removing the uncertainty over the scale of this settlement means that the investment case for this bank is much clearer," he added.The bank said the settlement had been agreed in principle, but it was still subject to it entering into a legally-binding agreement with the DoJ, adding that there could be no assurance that this would happen.If the settlement is confirmed, the bank said it would reduce its common equity tier one ratio - a key benchmark of banking strength - by 50 basis points to 15.1 per cent, which remains well above its target of 14 per cent. This is likely to fuel hope that the bank will soon be able to fulfill its promise of restoring the dividend after making its first annual profit in almost a decade last year.