Royal Bank Of Scotland Is Making Progress Slowly
The Royal Bank Of Scotland: Undervalued As Restructuring Moves Forward
Helix Investment Research • 17 Comments
Helix Investment Research • 17 Comments
Jul. 6, 2015, 11:18 AM
- If true, the news means the government envisions selling shares at a faster pace than markets expect, reports Reuters, with a possible first sale in September.
- It also means the U.K. will almost certainly take a sizable loss on at least its initial sales.
- The U.K. put £45.8B into RBS during the financial crisis, leaving it with a 78% stake in the bank now worth about £32B.
Jul. 3, 2015, 3:39 AM
- According to documents filed in a U.S. court, Royal Bank of Scotland (NYSE:RBS) may need to pay $13B to settle claims it misled investors over the sale of about $32B in mortgage-backed debt.
- The size of the settlement could also make it difficult for Britain's finance ministry to proceed with its plan to start selling the government's 78% stake in the bank in coming months.
- Related: Bloomberg: RBS mortgage tab could hit $4.5B (May. 27 2015)
- Related: Court says Nomura, RBS misled investors (May. 12 2015)
Jun. 19, 2015, 7:51 AM
- Goldman Sachs (NYSE:GS) has been hired to replace JPMorgan (NYSE:JPM) as the U.K. government's adviser for the privatization of Royal Bank of Scotland (NYSE:RBS), reports Bloomberg.
- JPMorgan was hired in 2013 with the expectation that the role would come up for review from time to time.
- The government owns about 79% of RBS.
- Goldman's winning of the business comes as the bank bids for more than $20B in mortgages being sold by U.K. Asset Resolution, Ltd. JPMorgan bought about $4B in mortgages from the operation late last year.
Jun. 10, 2015, 4:32 PM
- Chancellor George Osborne uses the occasion of his annual Mansion House speech to say the government will begin unloading its stake in Royal Bank of Scotland (NYSE:RBS) - a highly-anticipated and mostly symbolic move to show how the country has moved past the financial crisis.
- The government's stake is currently worth £32.1B.
- Osborne says shares will be sold even at a loss (which seems certain for at least the initial sales). Wednesday's close of £3.55 stands against the average price paid during the bailout of £5.
- The government's plan has gotten the blessing of the Bank of England and independent adviser Rothschild.
Jun. 9, 2015, 1:09 PM
- Citing the reduced prospect of government support in a times of stress, S&P cuts the credit ratings of Deutsche Bank (DB -2.4%), Royal Bank of Scotland (RBS +0.7%), and Commerzbank (OTCPK:CRZBY +0.1%) to BBB+, three notches above junk territory. Barclays (BCS +0.2%) is downgraded to A-, one notch above the other three.
- For RBS, Barclays, and Commerzbank, it was a one-notch downgrade. For Deutshce, two notches.
- Source: WSJ
Jun. 2, 2015, 3:55 AM
- Following the U.K. general election in May, British Chancellor George Osborne is expected to lay out plans for privatizing Royal Bank of Scotland (NYSE:RBS) in next week's Mansion House speech, sources told FT.
- Yesterday, the U.K. Treasury committed to selling another chunk of Lloyds (which was also bailed out during the financial crisis) over the next 12 months.
- The British government currently owns 80% of RBS and an 18.99% stake in Lloyds.
- Previously: U.K. extends plan to cut Lloyds stake (Jun. 01 2015)
- Previously: British Chancellor may sell RBS shares at a loss (May. 11 2015)
May 29, 2015, 7:22 AM
- The U.K. government is interested in assisting smaller lenders challenge the dominance of the country's four largest banks, and an antitrust review of Royal Bank of Scotland (NYSE:RBS) may result in the bank having to give more assets to its Williams & Glyn business, which has 307 branches, reports Bloomberg.
- The review and possible results sound a lot like what happened with Lloyds two years ago when it was forced to give more assets to its TSB Banking Group before putting it on the block.
- RBS plans to sell shares in the Glyn operation in Q4 of next year.
- The UK. Competition and Markets Authority will formally publish its report in July.
May 27, 2015, 8:12 AM
- Royal Bank of Scotland (NYSE:RBS) is one of the few lenders who have yet to settle with the FHFA over MBS sold to the GSEs during the housing boom. Bloomberg Intelligence analyst Elliot Stein figures the final settlement will be closer to the $4B JPMorgan paid rather than Deutsche Bank's $1.9B deal.
- RBS is seeking to have the case dismissed, but good luck with that. Both it and Nomura lost a separate FHFA case earlier this month.
May 21, 2015, 7:58 AM
- Just having been hit with $3B over currency-rigging charges yesterday, Barclays (NYSE:BCS) and RBS will have to set aside another $11B within two years, according to JPMorgan.
- For RBS, it still faces billions in potential MBS costs, and Barclays isn't finished with forex-related fines. Both, says JPMorgan, will need to top up reserves to compensate customers for payment protection insurance they didn't want or need.
May 20, 2015, 10:10 AM
- Those facing criminal charges from the DOJ are UBS (already reported, the stock is up 3.4% today), Barclays (BCS +2.5%), Citigroup (C -0.5%), JPMorgan (JPM -0.4%), and RBS (RBS +1.6%).
- Bank of America (BAC -0.4%) faces a $205M fine by the Fed, but no criminal charges. Fines by the Fed for the other banks range from $274M-$342M.
- There are fines from other regulators as well, with the total for all the banks summing to $5.8B. Barclays looks to be hit the hardest on that front, with total monetary penalties of $2.4B.
May 14, 2015, 7:55 AM
- "Guilty" is the new "neither admitting nor denying the charges."
- Yes, the DOJ looks set to extract guilty pleas on felony charges from five big banks over forex rigging, but life will go on for the lenders without much of a hiccup (after paying billions in fines), according to DealBook.
- Barclays (NYSE:BCS), JPMorgan (NYSE:JPM), Citigroup (NYSE:C), RBS, and UBS are the five whose holding companies will plead guilty, according to the report.
- While the guilty pleas are a nice feather in the caps of prosecutors, they seem to me more symbol than substance - too harsh a penalty would imperil banking operations, and behind the scenes, bank lawyers are working the phones with regulators to assure the felons won't be barred from certain businesses.
May 13, 2015, 3:07 PM
- The British government still holds and 80% stake in Royal Bank of Scotland (NYSE:RBS) and a 20% stake in Lloyds (NYSE:LYG). JPMorgan had previously been tapped to advise on the re-privatization, but the U.K. is now putting the business back up for bid (not a totally unexpected move).
- The U.K.'s RBS stake is currently worth more than $50B.
- A slate of 18 banks, including JPMorgan, would be eligible for the advisory job - a pretty sizable one given the government's stake in RBS alone is worth more than $50B.
- Source: WSJ
May 13, 2015, 2:23 AM
- Philippe Selendy, a lawyer for the FHFA, expects Nomura (NYSE:NMR) and Royal Bank of Scotland's (NYSE:RBS) shoddy MBS conduct before the financial crisis to result in a judgment exceeding $805M.
- Despite the hefty amount, the two would likely receive the mortgage bonds in exchange, which are estimated to be were worth $434M-$479M.
- A proposed judgment is expected to be filed in court Friday.
- Previously: Court says Nomura, RBS misled investors (May. 12 2015)
May 12, 2015, 12:37 PM
- "There would be a massive impact across London if a bank the size of HSBC left," says Davide Serra, founder of hedge fund Algebris, and who has advised the government on its holdings of Lloyds (NYSE:LYG) and RBS. "We are talking 10% of London's GDP, if you factor things like personnel moving."
- What has HSBC along with Standard Chartered (OTCPK:SCBFF) considering pulling their HQ out of the U.K. is the country's bank levy - an annual tax on U.K. banks of 0.21% of assets (foreign banks pay that amount only on their U.K. liabilities). Serra: “The bank levy is totally unsustainable. If the U.K. takes 25% of U.K. banks’ profitability, no bank will want to be domiciled here. It is a total disaster for the U.K.”
- Algebris' long/short equity strategy is ahead 27% YTD, while its credit strategy is up 5.14%. Also among its bank holdings is the equity and credit of Lloyds, and Serra calls CEO Hora Osorio one of the bet bank chiefs in Europe.
May 12, 2015, 2:45 AM
- "The magnitude of falsity...is enormous," declared U.S. Judge Denise Cote, ruling that Nomura (NYSE:NMR) and RBS made false statements in selling MBSs to Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) before the financial crisis.
- The two banks have been the only ones out of 18 financial firms that took their case to trial, arguing that it was the housing crash, and not deceptive loan documents, that caused the bonds to collapse.
- The other firms — including Goldman Sachs and Bank of America — settled, together paying nearly $18B in penalties.
- Previously: Nomura wants day in court over mortgages (Mar. 16 2015)
May 11, 2015, 3:28 AM
- British Chancellor George Osborne is poised to fast-track a £35B sale of the government's stakes in Royal Bank of Scotland (NYSE:RBS) and Lloyds (NYSE:LYG) after the Conservatives' election victory on Thursday.
- Treasury officials are examining plans for an early disposal - at a loss to the taxpayer - of RBS shares, and a discounted £4B sale of Lloyds stock to the public, the Sunday Times reported.
- The British government currently owns 80% of RBS (which was rescued with a £45B state bailout during the financial crisis) and owns a 21.9% stake in Lloyds, down from a peak of 40% in 2009.
Royal Bank of Scotland Group Plc operates as an international banking and financial services company that provides a wide range of products and services to personal, commercial, and large corporate and institutional customers through its two principal subsidiaries: The Royal Bank of Scotland Plc... More
Industry: Money Center Banks
Country: United Kingdom
Other News & PR