Feb. 27, 2014, 9:09 AM
Feb. 27, 2014, 3:04 AM
- RBS's (RBS) net losses deepened to £9B from £6.06B a year earlier, hurt by the setting aside of £3.8B for compensating clients for the mis-selling of products, and £4.8B of other impairments and provisions.
- The bank's operating loss after items widened to £8.2B from £5.28B in 2012, missing consensus of £6.7B.
- Revenue dipped 12% to £19.44B.
- RBS intends to slash £5B ($8.34B) of costs during the next five years and cut jobs as part of a restructuring in which it will refocus on its U.K. activities and merge seven units into three.
- The bank has also lowered its cost-to-income target to 55% by 2017 from 65% currently, which will necessitate cutting £50B of risk-weighted assets from its international banking and securities unit by 2020.
- RBS reduced its 2013 bonuses to £576M from £679M, although given the bank's massive losses, the payouts are already causing controversy. (PR)
- More positively, RBS is poised to raise £1.1B from the sale of its remaining 28.2% stake insurer Direct Line.
- Shares are -3.9% in London.
Feb. 21, 2014, 4:16 AM
- Royal Bank of Scotland (RBS) is reportedly planning to shed 20,000-30,000 jobs out of a total of 120,000 as part of an overhaul in which it would focus on U.K. retail and commercial lending, and further cut its investment-banking and international operations.
- Much of the headcount reduction will come from the divestment of assets, with the sale of the RBS's U.S. business Citizens accounting for 18,500 positions and the IPO of 315 branches - renamed Williams & Glynn - 4,500.
- New RBS CEO Ross McEwan is set to unveil the restructure along with the bank's FY results on Thursday next week.
Feb. 19, 2014, 9:07 AM
- The number of London RBS currency traders on suspension amid allegations of foreign exchange rigging rises to three, reports Reuters. Put on leave earlier this week, senior trader Ian Drysdale is now suspended.
- The bank declined to comment, and Drysdale couldn't be reached, but earlier this week RBS said it was reviewing rules on currency dealers trading with their own money.
Feb. 19, 2014, 7:08 AM
- State-owned Royal Bank of Scotland (RBS) de-risks a little bit more, offloading parts of its structured retail investor products and equity derivatives businesses, as well as related market-making activities to BNP Paribas (BNPQY) for an undisclosed amount, though RBS says the price is insignificant.
- Shares are off slightly in London action.
Feb. 12, 2014, 3:13 PM
- There have been a number of suits against the global banks over claims of forex manipulation, but this latest by the City of Philadelphia Board of Pensions and Retirement is the first to include research highlighting unusual movements in major currencies.
- Using data compiled by Fideres, the plaintiffs analyzed daily trading right around the 4 PM fix of currency prices ... curiously, anomalous price movements became rarer and less pronounced after the initial reports of rigging surfaced last summer.
- Morgan Stanley has spent some time looking at euro/dollar spikes at 4 PM and also concluded they were unrelated to economic events. Instead of collusion though, Morgan pins the blame on computerized trading programs.
- The seven banks sued by Philadelphia which is seeking damages as high as $10B: Barclays (BCS), Citigroup (C), Deutsche Bank (DB), HSBC, JPMorgan (JPM), RBS, and UBS.
Feb. 5, 2014, 12:35 PM
- Ben Lawsky, New York's financial services superintendent, reportedly has opened an investigation into manipulation of the currency markets by large banks and is requesting documents from more than a dozen institutions.
- Lawsky is said to have asked for documents from Barclays (BCS), Credit Suisse (CS), Deutsche Bank (DB), Goldman Sachs (GS), Lloyds (LYG), Royal Bank of Scotland (RBS), Societe Generale (SCGLF, SCGLY) and Standard Chartered (SCDRF, SCBFF).
Feb. 3, 2014, 3:13 PM
- Until now, just a handful of lenders are in the business of refinancing student loans, with just Wells Fargo and SunTrust among the only two of the seven largest banks in the private loan market doing so. But RBS's Citizens Financial just rolled out a refi product, and Discover (DFS -2.4%) chief David Nelms tells American Banker his company plans to follow suit.
- Discover made more than $1B in private student loans in 2013 - 13% of the company's total loan production. For now, low variable rates make the business a discouraging one for lenders, and for borrowers, there's not a ton of incentive to refinance. Private loans typically have rates higher than government ones and have fewer consumer protections.
- Still, should the trend catch fire, those lenders without a program in place could find themselves losing market share.
Feb. 3, 2014, 7:53 AM
- New CEO Ross McEwan plans to appoint acting retail business chief Les Matheson to the role permanently, reports the FT, and is hoping to name a new finance head by the end of this month. Philip Broadley - who just stepped down from the CFO job at Old Mutual - is among those on the shortlist, according to sources.
- The hunt for a finance chief could be complicated by four other large U.K. financials searching for the same. Being state-owned and with such intense focus on the bank's pay, RBS could be at a particular disadvantage.
- Other changes could include a new appointment to the SME business which has been under pressure of late.
- RBS -0.8% in London action
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. 28, 2014, 11:21 AM
- The surprising £2.9B of Q4 charges primarily due to MBS litigation doesn't change the Buy-thesis on RBS, says Jefferies, who had previously targeted a worst case litigation risk of £4B.
- Now with some concrete numbers, it appears the capital impact is manageable and was already factored into the planning behind the creation of the bad bank.
Jan. 27, 2014, 11:36 AM
- Previewing its Q4 results, Royal Bank of Scotland (RBS -0.7%) adds £1.9B to litigation reserves, primarily for MBS. Another £465M is added due to the Payment Protection Insurance issue, and another £500M for interest rate hedging products.
- As for operations, the bank recognized an additional £4B-£4.5B in impairments and asset valuation adjustments in conjunction with the creation of RBS Capital Resolution. Non-core asset reduction went faster-than-anticipated in Q4 resulting in Third Party Assets below previous guidance of £35B and an operating loss in that division for the quarter.
- The press release includes video statements from the CEO And Chairman.
Jan. 22, 2014, 11:54 AM
- Royal Bank of Scotland (RBS -1.1%) is the worst performer in the U.K. banking sector as UBS downgrades to Sell and Credit Suisse reiterates its own Sell rating. They join JPMorgan who yesterday cut to Underweight.
- Also on the mind of U.K banks today is a fall in the jobless rate to 7.1% - just 10 basis points away from the level at which the Bank of England says it will begin considering rate hikes.
Jan. 22, 2014, 10:54 AM
- JPMorgan (JPM), UBS, Credit Suisse (CS), and RBS are among the lenders (a fifth may be involved as well) looking to settle a EU probe into rate-fixing in the Swiss franc Libor rate, reports Bloomberg.
- The investigation into Swiss Libor comes alongside probes in Euribor and yen Libor in which settlements have already been reached. Sources say any fines in the Swiss investigation will be smaller than the other two due to the size of the market.
- Look for deals to be inked by the end of July.
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."
Jan. 13, 2014, 7:37 AM
- The Federal Reserve reportedly joins the long list of regulatory authorities probing alleged fixing of benchmark currency rates by the banks, raising the risk they'll be penalized over lax controls as other investigators look for criminal mischief.
- Deutsche (DB), Citigroup (C), Barclays (BCS), and UBS are the gorillas in FX trading - controlling more than 50% of the market, but they're not the only ones under the microscope. A trader who used to work at RBS and is now at JPMorgan (JPM) - where he's on leave - figures prominently in the investigation.
- Citigroup on Friday fired its former head of European spot trading.
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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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