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The Royal Bank of Scotland Group plc (RBS)

  • Sep. 23, 2014, 8:06 PM
    • RBS had hoped to sell 140M shares of Citizens Financial (NYSE:CFG) for between $23 and $25 each, but chatter over the past few days suggesting investors were balking at that price proved correct.
    • At a price of $21.50, the sale will raise $3B for RBS (prior to the greenshoe), well less than the $3.5B which would have been raised at the top end of the hoped-for range. While a setback, the more important issue will be the boost to RBS's capital ratio from cutting its stake in Citizens below 50% and removing the units assets from its balance sheet.
    • Today's offering was for roughly 25% of Citizens.
    • Previously: Largest bank IPO since Goldman prices today
  • Sep. 23, 2014, 9:41 AM
    • Royal Bank of Scotland's (RBS +0.2%) IPO of Citizens Financial Group could raise as much as $3.5B when it prices after the close today. It would be the largest bank IPO in the U.S. since Goldman came public in 1999.
    • The deal will free RBS of unneeded assets amid the new regulatory regime and allows Citizens to detach itself from its parent. "Citizens has some catching up to do compared to other U.S. regional banks,” says Morningstar's Dan Werner. At the high end of the expected offering range of $23-$25 per share, Citizens would be valued at just 1.07x tangible book vs. 1.91x for other U.S. banks with a market cap greater than $1B. The bank's ROE last year of 5% compares to 10.7% at PNC Financial and 13.4% at Fifth Third.
    • Citizens will trade on the Big Board under the ticker symbol CFG. RBS is selling 140M shares or about 25% of the bank.
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  • Sep. 19, 2014, 12:25 PM
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  • Sep. 19, 2014, 3:02 AM
    • European equity futures (NYSEARCA:EWU) indicate positive opens following Scotland's "no" vote. Euro STOXX 50 futures is up 1%, while FTSE 100 futures indicates U.K. markets could open up 1.1%. Pound futures (NYSEARCA:FXB) are up about 0.5%.
    • With 31 of 32 constituencies now final, unionists had won 55% of the vote and separatists had 45%.
    • Shares of stocks exposed to Scotland like Royal Bank of Scotland (NYSE:RBS) and Lloyds (NYSE:LYG) indicate early gains of 2-3%.
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  • Sep. 17, 2014, 3:52 PM
    • Though most of the polls give the "No" (to breaking away from the U.K.) camp the lead, the pound (NYSEARCA:FXB) is behaving a bit nervously. It's now slightly lower on the session after being up nicely this morning following a larger-than-expected decline in unemployment.
    • Independence would be "an economic trapdoor down which we go, from which me might never escape," says former U.K. PM Gordon Brown in the sort of fear-mongering comment becoming fairly typical from politicians who support the status quo.
    • “Secession would be a catastrophe for Scotland,” says Spanish foreign minister Garcia-Margallo. “It would start a process of Balkanization that nobody in Europe wants.” Spain, of course, has its own secession issues in Catalonia.
    • The U.K. banks are showing little nervousness, with Barclays (BCS +0.8%), RBS (RBS +0.8%), and Lloyds (LYG +1.5%) all in the green, and HSBC (HSBC) just marginally lower.
  • Sep. 16, 2014, 8:15 AM
    • Shedding more noncore costs, Royal Bank of Scotland (NYSE:RBS) has dismissed most of its team - about 10 jobs - overseeing debt capital markets in central and eastern Europe, Middle East, and Africa, reports Bloomberg.
    • "RBS probably had one of the best teams in this region,” says a former Lloyds banker. “It’s a shame to see them retrenching, but the quality and now availability of these individuals is probably an opportunity for their competitors.”
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  • Sep. 11, 2014, 7:45 AM
    • There's a lot being made of last weekend's poll showing a majority of Scottish voters for the first time favoring independence, but in the spot where folks need to put money behind their opinions, it's not even close.
    • Wagers placed at Betfair Group show an 80% chance of a "No" vote for independence - roughly £4M has been placed on no and just £1M placed on yes. "The big money trades continue to go on no, fueled by significant bets from south of the border," says Betfair.
    • The easiest way to play a "No" vote (referendum is Sept. 18) would probably be to buy pounds, but, alas, it's bounced by nearly 200 pips since diving Monday morning in wake of the weekend poll.
    • ETFs: FXB, GBB
    • Other possibilities would include buying the British banks - BCS, RBS, LYG, HSBC, OTCPK:SCBFF - which have also been under pressure on worry of a break-up.
    • Previously: RBS, Lloyds to relocate if Scottish independence announced
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  • Sep. 11, 2014, 4:13 AM
    • Both Royal Bank of Scotland (NYSE:RBS) and Lloyds (NYSE:LYG) have confirmed that they will relocate to England, should Scottish independence be declared next week. RBS says independence will create uncertainties which could impact its ability to borrow.
    • RBS and Lloyds will have at least 18 months after the vote to take whatever action they consider necessary while the terms of Scotland's exit from the U.K. is discussed.
  • Sep. 8, 2014, 7:59 AM
    • "A wall of money has gone out of the banks and into fines and redress," says KPMG's U.K. head of banking Richard McCarthy. "Hopefully the most egregious things have come out and hopefully the banks will be able to move forward."
    • Over the last five years, according to KPMG, the U.K.'s largest banks - BCS, RBS, HSBC, LYG, OTCPK:SCBFF - have cut consumer and business lending by $595B, or 14%.
    • "There is light at the end of the tunnel," says McCarthy, with the report noting redress costs and fines fell 44% to £2.4B in 2014's first six months from a year ago.
    • Meanwhile, the banks are sharply lower premarket over Scottish independence jitters. BCS -3.5%, RBS -4.1%, LYG -4.9%, HSBC -2%.
    • Previously: Cable tumbles over Scotland referendum
  • 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.
    • Prospectus
    • 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.
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  • Sep. 5, 2014, 3:41 AM
    • U.S. Federal Judge Denise Cote has ruled that investors may press claims against 12 major banks for violating antitrust law by limiting competition and fixing prices in the $21T CDS market, even though improved liquidity should have driven costs down.
    • The defendants include BofA (NYSE:BAC), Barclays (NYSE:BCS), BNP Paribas (OTC:BNPZY), Citigroup (NYSE:C), Credit Suisse (NYSE:CS), Deutsche Bank (NYSE:DB), Goldman Sachs (NYSE:GS), HSBC (NYSE:HSBC), JPMorgan (NYSE:JPM), Morgan Stanley (NYSE:MS), RBS (NYSE:RBS) and UBS (NYSE:UBS).
  • Aug. 28, 2014, 2:54 PM
    • The FHFA launched 18 lawsuits in 2011 against banks over about $200B in MBS. Many have settled - the latest being Goldman Sachs last week - but HSBC, Nomura (NYSE:NMR), and RBS (which is a defendant in the Nomura case) are among a group which hasn't.
    • The ruling from federal Judge Denise Cote sets up a Sept. 29 trial start date for HSBC, and the bank has estimated $1.6B in possible exposure.
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  • Aug. 18, 2014, 3:47 AM
    • Eurozone banks are expected to borrow about €250B in cheap four-year money from the European Central Bank in September and December under the ECB’s "targeted long-term financing operations".
    • The new loans would come on top of the more than €1T in cheap finance the ECB pumped into the financial system between late 2011 and 2012 to avert a financial crisis.
    • The new funds are expected to boost lending to the region’s credit-starved businesses.
    • Europe’s economic outlook has not been pretty. Last week, figures outlined a slowdown in Germany and France and Italy in recession.
    • Related stocks: SAN, DB, IRE, CS, ING, BBVA, BCS, RBS, HSBC, LYG
    • ETFs: EUFN
  • Aug. 13, 2014, 7:12 AM
    • Citizens CEO Bruce van Saun was brought in by parent RBS to clean things up ahead of a sale or IPO, and a key task is to improve lagging ROE. Among his moves have been building out areas like mortgage banking, auto finance, and small business banking, while disposing of unnecessary branches to cut costs.
    • Now the bank is in the process of adding about 70 staff to its commercial banking division as it seeks to grow the unit nationwide. “This is something we’ve been on for a while but we’re at the point where all these pieces are coming together,” says Robert Matthews, vice-chairman of commercial banking at Citizens.
    • Citizens was among the lenders which failed the Fed's stress tests this year and will not resubmit its capital plan until 2015, meaning no boosted dividend back to RBS until at least then. A float of a 20-25% stake in the bank is expected in Q4.
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  • Aug. 11, 2014, 6:15 AM
    • Royal Bank of Scotland (NYSE:RBS) is looking to sell Coutts International, its international arm of its private bank, Reuters reports.
    • The bank has attracted several offers from a range of bidders for the international unit, including undisclosed Asian and North American parties for a business which manages roughly 40B Swiss francs ($44.2B) in client assets.
    • Last year, Coutts International's operating profit stood at 103M francs excluding provisions, such as the U.S. tax crackdown affecting its Swiss arm.
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  • Aug. 5, 2014, 7:18 AM
    • Moody's view of the sector is downgraded to "negative" from "stable," suggesting ratings cuts could be in the offing. At issue are new rules designed to prevent the use of taxpayer funds to rescue struggling operators.
    • Also of note, says Moody's analyst Carlos Suarez Duarte, is continued exposure to both conduct and litigation charges."
    • Those with negative outlooks include: LYG, BCS, RBS, HSBC.
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Company Description
Royal Bank of Scotland Group (The) PLC is an international banking and financial services company. The Company through its subsidiaries provides banking products and services to personal, commercial and large corporate and institutional customers.
Sector: Financial