RBS.L - The Royal Bank of Scotland Group plc

LSE - LSE Delayed price. Currency in GBp
119.91
-0.24 (-0.20%)
As of 1:49PM BST. Market open.
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Previous close120.15
Open122.55
Bid119.70 x 0
Ask119.85 x 0
Day's range116.45 - 123.66
52-week range2.23 - 265.00
Volume17,508,070
Avg. volume31,603,715
Market cap14.501B
Beta (5Y monthly)1.48
PE ratio (TTM)5.33
EPS (TTM)22.50
Earnings date31 Jul 2020
Forward dividend & yieldN/A (N/A)
Ex-dividend date26 Mar 2020
1y target est301.06
  • CoCo Bond Investors Face a Covid-19 Reckoning
    Bloomberg

    CoCo Bond Investors Face a Covid-19 Reckoning

    (Bloomberg Opinion) -- The Covid-19 pandemic is even starting to affect the highly specialized world of bank capital.Lloyds Banking Group Plc, a large British lender, has just become the third European bank this year to do what was once unthinkable and decline to redeem an outstanding “CoCo” bond at its first call date. This form of hybrid debt — also known as additional tier 1 (or AT1) regulatory capital — is especially risky because the investor bears the losses if the bank fails, and it usually pays a generous interest rate.Because of their special status, there had always been a tacit understanding — though not a legal obligation — that investors would be able to cash in the bonds at the first redemption date, if they so chose, at least with European CoCos. But that tradition looks to be well and truly over among the stronger banks.Lloyds cited “extraordinary market challenges presented by Covid-19” as the reason to extend its own AT1s. With its dividend payments to equity holders suspended currently at the behest of the U.K. financial regulator, because of the coronavirus crisis, it would have looked rum indeed if the bank had cut its equity capital for the benefit of a small group of bondholders. This select bunch ought to have known the risk.The financial savings for Lloyds are just as relevant. By retaining the 6.375% 750 million-euro ($824 million) CoCo, it will switch to paying a floating coupon just above 5%. If it had redeemed the AT1 and issued a replacement bond, it would have had to offer a higher coupon to reflect the current market, probably one above 7%.Lloyds has a solid Tier 1 capital base of 16.9%, so in normal times it would have been expected to keep its bond investors happy. But regulatory pressure and the increase in yields on risky debt during the current crisis has forced even the better capitalized banks to prioritize their financing costs.Spain’s Banco Santander SA set the precedent last year of a blue-chip lender not redeeming its AT1 debt out of pure economic self-interest. That’s standard practice in the U.S. market, but Santander’s action caused a storm here in Europe. Germany’s Deutsche Bank AG and Aareal Bank AG have also skipped calls this year.This Americanization of the European CoCo market looks like a trend. ABN Amro Bank NV and Royal Bank of Scotland Group Plc both have AT1 bonds with calls due this summer, and Barclays Plc is due later in the year. They may follow the Lloyds example and retain cheap AT1 capital raised at lower yields.Banks have benefited hugely from AT1 issues as regulators count it as permanent equity (although it was almost always redeemed), meaning it counts toward capital buffers. And the cost is much lower for the issuer than true perpetual debt. Investors have been happy to play along as the yields far exceed those on bank debt with legally enforceable redemption dates.The Lloyds move is a wake-up call for AT1 investors.While the bigger banks’ CoCo bonds will probably still be popular, even if the call date is no longer guaranteed implicitly, the change might do more damage to weaker lenders. If investors no longer feel confident that their money will automatically be returned at the first redemption date, they’ll demand a higher return for the risk.The CoCo market only reopened tentatively this month with a new Bank of Ireland Group Plc deal. The Irish lender did what Lloyds refused to do and redeemed its existing AT1 and reissued at a higher cost. At least it managed to keep its investors happy and on board.This new separation between large stable banks being able to act according to their own economic advantage, while smaller rivals have to offer chunkier premiums, is a worry for the health of the financial system. It ought to be an urgent matter for consideration by European regulators. Forcing the strong banks to keep capital has consequences for their less illustrious peers.  This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • 'Significant majority' of RBS staff home-workers to remain in place until September - memo
    Reuters

    'Significant majority' of RBS staff home-workers to remain in place until September - memo

    Royal Bank of Scotland Chief Executive Alison Rose said on Thursday a "significant majority" of more than 50,000 staff working from home since the coronavirus lockdown would continue to do so until September, according to a memo seen by Reuters. RBS has also temporarily banned hot-desking and said it would place at least one empty desk in between people to ensure social distancing. Since lockdown started, around 10,000 staff have continued to work in branches and some offices.

  • British backing gives some RBS investors comfort in crisis
    Reuters

    British backing gives some RBS investors comfort in crisis

    Best known as Britain's biggest financial crisis failure, some investors and analysts view majority state-owned Royal Bank of Scotland as the lender likely to emerge strongest from the coronavirus downturn. RBS had built the largest capital surplus of any major British bank before the pandemic struck, some 14 billion pounds ($17 billion) above the regulatory minimum, and had hoped to use much of this to buy back the government's 62% stake. Now investors are betting this capital cushion, which will help it absorb loan losses resulting from the economic crunch, will help RBS gain greater market share and potentially restore a dividend ahead of rivals.

  • Reuters - UK Focus

    FOCUS-British backing gives some RBS investors comfort in crisis

    Best known as Britain's biggest financial crisis failure, some investors and analysts view majority state-owned Royal Bank of Scotland as the lender likely to emerge strongest from the coronavirus downturn. RBS had built the largest capital surplus of any major British bank before the pandemic struck, some 14 billion pounds ($17 billion) above the regulatory minimum, and had hoped to use much of this to buy back the government's 62% stake. Now investors are betting this capital cushion, which will help it absorb loan losses resulting from the economic crunch, will help RBS gain greater market share and potentially restore a dividend ahead of rivals.

  • Just 10% of promised government-backed coronavirus loans reach businesses
    Yahoo Finance UK

    Just 10% of promised government-backed coronavirus loans reach businesses

    £32bn has been lent to businesses under the state-backed schemes CBIL, Bounce Back loans, CLBILs, and CCFF. The chancellor had promised £330bn of loans.

  • Reuters - UK Focus

    Keep trading from the kitchen: UK bankers face months more of homeworking

    Many of the City of London's bankers and traders will be working from their kitchens or bedrooms for at least a year under some scenarios being planned by finance companies in Britain. Banks, insurance companies and asset managers have had to work remotely since the country locked down in March to fight the coronavirus pandemic. The radical shift from trading floors to people's homes has been deemed a big success in coping with record breaking volatility across financial markets.

  • Reuters - UK Focus

    U.S. federal court to consider payout suit brought by RBS whistleblower

    WASHINGTON D.C./LONDON, May 12 (Reuters) - The U.S. Second Circuit Appeals Court will on Tuesday consider arguments by an ex-Royal Bank of Scotland employee who is suing the U.S. Justice Department and Securities and Exchange Commission for a bounty he says he is owed under a whistleblower program. The suit brought by former RBS risk manager Victor Hong could result in a landmark ruling if the court finds the agencies broke the law, or force them to reconsider his case or produce documents that may shed light on how they handled it. In February, Hong filed a petition with the court alleging the agencies flouted the law "in bad faith" when assessing whether he was due a payout for helping federal probes into the British bank's mis-selling of mortgage bonds in the run-up to the 2007-08 financial crisis.

  • Coronavirus: Renters will outnumber mortgage holders by 2029, RBS forecasts
    Yahoo Finance UK

    Coronavirus: Renters will outnumber mortgage holders by 2029, RBS forecasts

    RBS plans to target young renters to help them onto the housing ladder following the coronavirus pandemic, as 35 to 44-year-old tenants are predicted to outnumber mortgage holders by 2029.

  • COVID-19 pandemic could cost UK banks £25bn
    Yahoo Finance UK

    COVID-19 pandemic could cost UK banks £25bn

    Fitch Rating said the UK's five biggest banks would likely set aside billions of pound more to cover losses as the year progresses.

  • Coronavirus: Banks grant 1 million credit cards and loans payment holidays
    Yahoo Finance UK

    Coronavirus: Banks grant 1 million credit cards and loans payment holidays

    Banks and credit card providers have granted credit card repayment holidays to 700,000 customers.

  • Government-backed coronavirus interruption loans hit £5.5bn
    Yahoo Finance UK

    Government-backed coronavirus interruption loans hit £5.5bn

    New figures show an additional £1.4bn has been lent under the scheme over the last week.

  • Reuters - UK Focus

    UK banks' lending to COVID-19-hit firms rises to 5.5 bln pounds

    British banks' lending to firms hit by the coronavirus under the government's main loan guarantee scheme for small and medium-sized firms has risen to 5.5 billion pounds ($6.8 billion) from 4.1 billion pounds last week, industry data showed on Thursday. Regulators and politicians have criticised banks for the slow pace of lending under the Coronavirus Business Interruption Loan Scheme (CBIL), which is 80% guaranteed by the taxpayer. UK Finance, the trade body for lenders, said its members had approved 33,812 of the 62,674 completed loan applications they had received as of May 6.

  • U.K. Banks Could Face $99 Billion Pandemic Losses, BOE Says
    Bloomberg

    U.K. Banks Could Face $99 Billion Pandemic Losses, BOE Says

    (Bloomberg) -- The U.K.’s banking industry has the financial strength to withstand the coronavirus pandemic, even though the central bank projects credit losses of about 80 billion pounds ($99 billion) in its latest stress test.The Bank of England said lenders could suffer impairments worth 3.5% of their loans to households and businesses by the end of 2021, if the economy deteriorates sharply. However, it emphasized that Britain’s banking system “is in a stronger position due to the regulatory reforms implemented after the 2008 financial crisis,” with enough capital to absorb losses and extra state support introduced during the pandemic to help borrowers and the economy.The BOE and regulators around the world have raced to help banks withstand the financial strains of the virus outbreak by reducing capital requirements, delaying new rules and making it easier for employees to work from home while complying with rules.Under the BOE’s stress test model published Thursday, corporate defaults could account for 19 billion pounds of losses despite a swath of government support programs, while consumer credit losses could spike and a 4 billion-pound hit from mortgage losses would be tempered by the payment holidays introduced in March.Trading desks could face 7 billion pounds of losses under this stress scenario, although the BOE noted that banks’ trading books are much smaller now than they were in the 2008 crisis.British lenders have already begun to brace themselves for the pandemic’s effects, last week setting aside billions of pounds to cover soured loans as the lockdown sends the U.K. economy into steep recession. They also warned of tough times ahead as the pandemic and its aftershocks cripple corporate clients in entire industries.The test included Barclays Plc, HSBC Holdings Plc, Lloyds Banking Group Plc, Nationwide, Royal Bank of Scotland Group Plc, Santander UK and Standard Chartered Plc.The central bank offered further relief on Thursday, announcing that it was cutting the capital requirement known as Pillar 2A to a “nominal amount” as volatility was making estimates difficult.(Adds detail on test and background from third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Reuters - UK Focus

    WRAPUP 2-Britain's mid-sized banks coping with coronavirus, but warn of pain ahead

    A slew of Britain's mid-sized banks on Wednesday reported steady deposits and demand in the face of the COVID-19 pandemic, but warned it was too early to assess the long-term damage of the outbreak to their businesses. Virgin Money made a first-half pretax loss after booking a 232 million pound ($289 million) provision for bad loans and likely defaults due to the pandemic, but reported a higher than expected capital buffer of 13% that steadied investor nerves. Smaller rival OneSavings Bank said its net loans and retail deposits held firm in the first quarter, as did its 2.66% net interest margin - a key measure of underlying profitability - despite the tough market conditions.

  • Coronavirus: Banks approve £2bn 'Bounce Back' loans in first 24 hours
    Yahoo Finance UK

    Coronavirus: Banks approve £2bn 'Bounce Back' loans in first 24 hours

    The banks received over 130,000 applications for ‘Bounce Bank’ loans on Monday alone.

  • Coronavirus: Virgin Money sets aside £232m to cover COVID-19 pandemic
    Yahoo Finance UK

    Coronavirus: Virgin Money sets aside £232m to cover COVID-19 pandemic

    The increase in loss coverage was based on modelling of 'severe' multi-year downturn in the UK that sees GDP fall by 10% and unemployment peak at 9.7%.

  • Reuters - UK Focus

    Irish mortgage approvals fall 9.9% year-on-year in March

    Mortgage approvals by Irish banks fell 9.9% year-on-year in March with the first major effects of the coronavirus set to become apparent in April's data, the Banking and Payments Federation Ireland (BPFI) said on Wednesday. Ireland's mortgage market recovered from a banking and economic crisis a decade ago to reach the highest level since 2009 last year when 9.5 billion euros ($10.30 billion) of debt was drawn down for house purchases. Ireland introduced stay-home measures almost six weeks ago to slow the spread of the novel coronavirus, shutting down all but essential operations and will only begin to slowly unwind them from May 18.

  • 3 reasons why the Royal Bank of Scotland (RBS) is my new favourite FTSE 100 bank stock
    Fool.co.uk

    3 reasons why the Royal Bank of Scotland (RBS) is my new favourite FTSE 100 bank stock

    Jonathan Smith writes on how the Royal Bank of Scotland (RBS) share price is a buy, given the capital buffer and strong net interest margin.The post 3 reasons why the Royal Bank of Scotland (RBS) is my new favourite FTSE 100 bank stock appeared first on The Motley Fool UK.

  • Royal Bank of Scotland (RBS) Q1 Earnings Fall Y/Y, Costs Down
    Zacks

    Royal Bank of Scotland (RBS) Q1 Earnings Fall Y/Y, Costs Down

    Royal Bank of Scotland's (RBS) first-quarter results reflect lower interest income and expenses.

  • Coronavirus: 'Significant' demand as 100% Bounce Back loans launch
    Yahoo Finance UK

    Coronavirus: 'Significant' demand as 100% Bounce Back loans launch

    Barclays received 200 applications in the first minute of opening and Lloyds had 5,000 applications by 10am on Monday.

  • Reuters - UK Focus

    UK banks say COVID-19 relief slowed by lack of full state loan guarantees

    Delays in offering full state guarantees on COVID-19 relief lending hampered the ability of banks to provide fast financial aid to companies in the first phase of the coronavirus pandemic, senior British bankers told lawmakers on Monday. Banks have come under fire from the Bank of England and the general public for not providing loans to companies fast enough as a national lockdown shutters swathes of an economy heading for deep recession. The chief executives of commercial banking at domestic lenders Lloyds Banking Group and Royal Bank of Scotland said the primary reason relief lending was faster in countries like Germany and Switzerland was due to 100% state guarantees offered from the onset of the crisis.

  • Reuters - UK Focus

    LIVE MARKETS-Opening Snapshot: Pressure on Thyssenkrupp and Rolls Royce

    You can share your thoughts with Thyagaraju Adinarayan (thyagaraju.adinarayan@thomsonreuters.com), Joice Alves (joice.alves@thomsonreuters.com) and Julien Ponthus (julien.ponthus@thomsonreuters.com) in London and Stefano Rebaudo (stefano.rebaudo@thomsonreuters.com) in Milan. European bourses match falls in Asia after a long weekend, as a new U.S.-China spat worries that the economy could come under renewed pressure for possible trade-war hostilities. Sentiment soured again after hoping for a relief due to easing of coronavirus outbreak induced lockdowns.

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