Helix Investment Research • 17 Comments
Sep. 8, 2014, 7:52 AM
- RBS is offering 25% or 140M shares of its U.S. banking subsidiary Citizens Financial Group at an expected price range of $23-$25 per share. The underwriter greenshoe is for another 21M shares.
- The stock will trade on the NYSE under the symbol CFG.
- RBS is lower by 4.1% premarket, thanks to jitters about Scottish independence, with a weekend poll showing those favoring a breakup with the U.K. pulling past those against for the first time. The referendum date is September 18.
Jul. 25, 2014, 9:13 AM
Jul. 25, 2014, 7:59 AM
- Out with preliminary Q2 results a week early, Royal Bank of Scotland (NYSE:RBS) is ahead 12.7% premarket after reporting net profit of £230M vs. £142M a year ago. Helping along earnings was a £93M release from loan loss provisions vs. a £1.12B charge last year.
- The bank recorded litigation and conduct charges of £250M in Q2 and says it expects higher cost for the full year.
- "Let me sound a note of caution,” says CEO Ross McEwan. "We are actively managing down a slate of significant legacy issues. This includes significant conduct and litigation issues that will hit our profits in the months and years to come ... No one should get ahead of themselves here - there are bumps in the road ahead of us.”
- Noting the beat is mostly attributable to loan loss charge reversals which is not sustainable, Citi's team views today's reaction as "overdone."
- The official Q2 report is due on August 1.
Jul. 10, 2014, 9:44 AM
- When the going gets tough, the tough suspend trading. Portugal has halted trade in Banco Espirito Santo with the stock off 17.2% on the session and 54% over the last month. At issue are financial troubles for the bank's privately-owned holding company, Espirito Santo International. Its accounts are currently under review by an external auditor who has identified irregularities and concluded the company "is in serious financial condition."
- Santander (SAN -5.8%), UBS (UBS -1.8%), Deutsche Bank (DB -3.1%), Bank of Ireland (IRE -5.6%), Credit Suisse (CS -2.8%), ING (ING -3.2%), BBVA (BBVA -3.1%). U.K. banks: Barclays (BCS -3.8%), RBS (RBS -1.9%), HSBC (HSBC -1.9%), Lloyds (LYG -2%).
- European financial sector ETF: EUFN -2.4%.
May 2, 2014, 9:18 AM
Mar. 26, 2014, 4:04 PM
- The Fed approves 25 out of 30 capital return plans from the nation's largest lenders, but rejects those from Citigroup (C), RBS Citizens, HSBC North America, Santander Holdings (SAN), and, of course, Zions Bancorp (ZION).
- Citi -3.3%, RBS -0.2%, HSBC -1.4%, Santander -1.5%, Zions -1.3% in after-hours trade.
Mar. 24, 2014, 12:32 PM
- Sumitomo Mitsui Financial Group (SMFG -1.8%) has held discussions with Royal Bank of Scotland (RBS +2%) about purchasing RBS's U.S. retail operation - RBS Citizens - reports the WSJ. Citizens has nearly 1.4K branches and $122B in assets across 12 states, and its sale would be among the largest U.S. deals since the crisis, and one of the largest-ever purchases of a U.S. bank by a foreign company.
- Citzens is a coveted target by acquisitive banks (TD has been rumored to have great interest), but RBS - despite being under heavy U.K. government pressure to raise capital - has been a reluctant seller. That attitude is starting to change, says the Journal, with new CEO Ross McEwan saying he wants to refocus the bank on its core U.K. market.
- The current plan is for an IPO of part of Citizens later this year to raise in the area of $10B, with a full exit by the end of 2016.
Feb. 27, 2014, 9:09 AM
Jan. 28, 2014, 1:29 PM
- Any hope the U.K. government had of selling any of its stake in Royal Bank of Scotland (RBS +4.1%) ahead of next year's general election has been abandoned, reports the FT, after the bank yesterday boosted provisions by another £3B.
- Some on both sides of the aisle had been keen on the idea of presenting the public with shares just ahead of the May 2015 polls, but the extra charges raises new concern about the bank's capital position and whether the stock price can recover enough for the state to say it made a profit (A thought: JPMorgan rode an unceasing wave of charges in 2013 to multi-decade highs in its stock price).
Jan. 17, 2014, 5:14 AM
- Royal Bank of Scotland (RBS) -2% premarket after Investec's Ian Gordon told clients to short the stock ahead of its full-year results next month.
- "'Short RBS' may be a crowded trade, but after a 19% 1-month 'spike,' we think it (once again) looks attractive. There are plenty of 'micro' issues which incrementally encourage us in relation to RBS, and which evidently leave us more positively disposed to the stock than the consensual sellside view. That said, the 'big picture' of a painfully slow recovery in earnings/returns still constrains our view on valuation. As such, we now recommend reinstating short positions ahead of full-year 2013 results on 27 Feb."
Dec. 3, 2013, 1:44 PM
- HSBC (HSBC -1%) is the downside outlier in a green U.K. banking sector after Nomura downgrades to Hold.
- In other U.K. banking news, RBS is forced to issue an apology for another technical glitch which left customers unable to access their accounts through ATMs, or pay for purchases with debit cards.
- CEO Hester: "Last night’s systems failure was unacceptable ... For decades, RBS failed to invest properly in its systems. It will take time, but we are investing heavily in building IT systems our customers can rely on.”
Nov. 1, 2013, 9:13 AM
Oct. 21, 2013, 9:36 AM
- The break-up of RBS into good and bad banks will be "unhelpful" says Mediobanca's Chris Wheeler, who questions the government's "political interference" (to be fair, said government owns 81% of the bank).
- Meanwhile, CEO Ross McEwan says the break-up talk is consuming much of the oxygen in the executive suite, but tells staff the move would affect just a small piece of RBS' business.
- "The truth is, the review and its outcomes are important, but not in the way many people think ... The future of this company will not be about whether we operate in particular areas or where our problem assets sit."
- RBS -5.1%.
Oct. 21, 2013, 9:15 AM
Jul. 9, 2013, 12:41 PM
"Could a bad bank be a good thing," asks Goldman, adding Royal Bank of Scotland (RBS +5.7%) to its Buy list amid reports the U.K. is considering splitting the lender into good and bad banks. The split, says Goldman, would pretty much turn "good" RBS into a domestic retail lender, with trading making up less than 10% of earnings and U.K. retail business generating about 75%.| Jul. 9, 2013, 12:41 PM
Jun. 13, 2013, 4:31 AM
RBS (RBS) shares drop 6.5% in London following the surprise news yesterday of the departure of CEO Stephen Hester, who this morning denied that he was forced out. The bank confirmed it will cut further jobs as part of a restructuring of its investment bank, with reports putting the number at around 2,000. Meanwhile, a parliamentary study that is to be released soon will reportedly say that there is good case for breaking up RBS into a "good" and "bad" bank but will stop short of saying that it should be done.| Jun. 13, 2013, 4:31 AM