Jul. 17, 2014, 4:54 AM
- Prior to its takeover of European bank supervision on November 4, the ECB will release collections of data on the euro zone's 128 most important lenders to insure the banks can withstand future crises.
- The published review in the second half of October will outline leverage measures, standardized ratios of non-performing loans and other statistics, giving the banks only two weeks to come up with plans to deal with capital shortfalls.
- Related stocks: SAN, DB, IRE, CS, ING, BBVA, BCS, RBS, HSBC, LYG
- ETFs: EUFN
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%.
Jul. 8, 2014, 8:01 AM
- It's been a tough year for the U.K. banks, but Lloyds (LYG) has shown relative strength, notes Investec's Ian Gordon and could return to positive EPS this year, while recovery for RBS remains a long way off.
- Further boosting Lloyds, says Gordon is valuation - trading at just 1.3x times his estimated 2015 book value, and the likely initiation of at least a token dividend for 2014.
- Patience is required for RBS, however, as the bank should continue to lose money for the next two years, It could take a successful IPO of Citizens - with full exit planned for 2016 - to trigger a meaningful move higher.
Jun. 24, 2014, 11:26 AM
- Citigroup (C), HSBC North America, RBS Citizens, and Santander Holdings U.S.A. (SAN) were originally required to re-submit capital plans by the end of business on Thursday, but - following requests from the banks - the Fed is giving them until January 5 of next year, the due date for the next round of annual plans for all of the lenders under the CCAR umbrella.
- Previously: Passing next stress test is job #1 at Citi
Jun. 20, 2014, 2:00 AM
- Royal Bank of Scotland (RBS) will pay $99.5M to settle a lawsuit which accused the bank of selling sour mortgages to Freddie Mac (FMCC). The case is one of two lawsuits filed by the Federal Housing Finance Agency against RBS.
- This also marks the 15th mortgage security settlement since 2011 won by the FHFA, on behalf of Fannie Mae (FNMA) and Freddie Mac.
May. 30, 2014, 7:32 AM
- RBS is looking for investors to buy a stake in Ulster Bank's operations in the Republic, or for another bank to merge with the division, after racking up £17B in losses since the property crash.
- Somebody's about to get a good deal as RBS' decision appears to be political (it's under pressure to pay back bailout funds) rather than financial, with analyst Stephen Lyons noting the curiosity of selling amid Ireland's rebound and Ulster having returned to making a profit.
- “The U.K. government is looking down the barrel of a general election,” says Ray Kinsella, banking professor at University College, Dublin. “There’s little doubt that the U.K. is putting pressure on RBS to accelerate restructuring, including increasing lending to the domestic economy, and to reduce its direct exposure to a problematic presence in the Republic.”
May. 29, 2014, 10:28 AM
May. 27, 2014, 2:52 PM
- Ahead of new U.S. regulations, RBS is planning to cut up to 400 trading jobs at its Stamford headquarters over the next 18 months, reports the WSJ. The bank is making the move as it exits its mortgage-trading and distressed-loan trading businesses, say sources. The bank's U.S. operation currently employs about 2.4K.
- New capital rules mandated by Dodd-Frank will apply to foreign banks with at least $50B in assets in their U.S. units, and RBS intends to cut about $10B in risk-weighted assets by the start of 2015 to get below the $50B threshold.
May. 22, 2014, 7:53 AM
- At issue is Royal Bank of Scotland's (RBS) £12B rights issue during the crisis in 2008, and hundreds have alleged they were misled and claimed damages of about £4B. Through nine of its pensions and investment management subsidiaries, Lloyds (LYG) has joined the action, seeking £420M.
- This week marked the six-year anniversary of the sale, the cut-off point at which damage claims must be submitted. RBS, at this point, has indicated no intention of settling.
May. 13, 2014, 3:26 AM
- RBS's (RBS) American subsidiary, Citizens Financial Group, has filed for an IPO in the U.S. as the British bank continues its strategy of refocusing on its U.K. operations and strengthening its capital base.
- Last year, RBS said it would sell 20-25% of Citizens by the end of 2014 via a U.S. listing.
- Citizens said it would trade under the ticker symbol "CFG", but it didn't say how many shares would be sold, nor at which price. The amount to be raised was put at a preliminary $100M, although the actual figure will probably be higher. Citizens itself won't receive any proceeds.
- The bank said that in March the Fed rejected its capital plan, while two units have received consent orders from regulators in relation to deceptive marketing, and to the implementation of the firm's checking account and funds transfer services.
- ETF: IPO
May. 2, 2014, 9:18 AM
May. 2, 2014, 3:28 AM
- Royal Bank of Scotland's (RBS) Q1 net profit soared to £1.2B ($2.02B) from £393M a year earlier, lifted by a significant drop in impairments at the bank's Irish division, and by not having to make new provisions for the mis-selling of protection insurance or toxic assets. Analysts had expected a loss of £200M.
- Pretax profit increased to £1.6B ($2.7B) from £826M, while operating earnings rose to £1.5B from £747M.
- Revenue fell to £5.05B from £5.16B but topped consensus of £4.7B.
- The common Equity Tier 1 ratio rose to 9.4% from 8.6% in December.
- RBS could float its Irish unit, Ulster Bank, The Irish Independent reports. Until now, RBS has been trying to sell a stake to a U.S. private-equity house or seek a merger with nationalized Irish peer Permanent TSB.
- RBS's shares are +9.95% in London. (PR)
Apr. 29, 2014, 8:03 AM
- Among the severe scenarios under which U.K. bank balance sheets will be tested for are a 35% fall in house prices, a sharp rise in interest rates over three years to 4%, GDP slumping 3.5% below its current level, and an unemployment rate peaking at 12%.
- Among those subject to the test: HSBC, RBS, BCS, LYG.
- The exams are being run alongside European-wide stress tests, with results expected to be published in Q4.
- Even banks who "pass" the test could be requested to boost their capital, warns the BOE.
Apr. 25, 2014, 1:59 PM
- U.K. Financial Investments - the body in charge of the government's 80% stake in RBS - had wanted to approve the bonus plan, reports the WSJ, but was overruled by politicians in the U.K. Treasury. To review, the UKFI was set up in 2008 to manage the government's banks stakes at "arms length."
- Treasury Chancellor George Osborne has been a loud opponent of salary caps proposed by European regulators, but his fingers work in the wind as well as anyone else's. He reportedly met with RBS CEO Ross McEwan yesterday to discuss the issue.
- "RBS is heading in the right direction, but it has not yet completed its restructuring and remains a majority publicly-owned bank. So an increase to the bonus cap cannot be justified," says a Treasury spokesman.
Apr. 25, 2014, 11:24 AM
- At issue are claims by the 5 institutional investors that they were misled about a €12B equity raise in 2008 as the bank sought to bolster capital amid the gathering crisis. Reuters reports they plan to file lawsuits in London on Wednesday.
- "While RBS and its former directors made some business decisions that have been criticized, this does not mean that they misled investors or acted illegally," says the bank in a statement.
Apr. 10, 2014, 3:27 AM
- RBS (RBS) has agreed to pay £1.5B ($2.5B) to the U.K. government to end the sides' dividend access share arrangement, which has been in place since the bank's £45.8B bailout during the financial crisis and gives the Treasury priority over dividend payments.
- The cancellation clears another obstacle to RBS's privatization and enables the bank to make its future dividend policy more clear. However, RBS has no plans to restart shareholder payouts in the near future.
- Meanwhile, the EU has given RBS extra time to divest 315 branches that the bank has to sell as a condition of its bailout. RBS must start selling shares in the branches, re-branded as Williams & Glyn, by the end of 2016 and divest the whole interest a year later. RBS plans to float Williams & Glyn in an IPO.
- RBS shares are +1.7% in London.
RBS vs. ETF Alternatives
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.
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