Strategic Finance
Better investments than RBS say analysts |
|
|
| Strategic Finance | |
| Written by Roberta Murray | |
| Friday, 06 August 2010 | |
|
RBS results show a return to profit, but is it an investment?
RBS (LON:RBS) shares are 1.92% higher at 53.00 on the FTSE 100 after the bank reported a return to profit. Results for RBS, a once-swaggering giant which became the biggest British casualty of the credit crisis, were boosted by gains of 1.05 billion pounds on redemption of own debt and the bank's participation in the government's Asset Protection Scheme, a program to help lenders deal with bad loans. But do RBS shares offer good value? Richard Hunter, Head of UK Equities at Hargreaves Lansdown Stockbrokers, has the following to say: "RBS has brought the half year reporting season to a close in quietly confident fashion. "The themes it has described are similar to those of its competitors this week, most notably a marked improvement in the impairment situation, coupled with a more challenging environment in investment banking. "Nonetheless, the company has crept back into the black, further asset disposals should help focus future strategy and the new management team are well aware of the length of time any potential recovery may take. Whilst the share price remains above the theoretical break even level, the major government stake will continue to overhang any further price appreciation. "Admittedly from a low base, the shares have gained 61% over the last six months, as against a 6% improvement for the wider FTSE100. However, despite the improvement in RBS’ fortune, the conclusion is perhaps unsurprising and twofold. "Firstly, the general market view is that holders of the stock should continue to do so and, secondly, that investors looking to enter the UK banking sector can find better prospects elsewhere in terms of both income and capital growth.”
|
|
Digg it! 
del.icio.us 
Newsvine 
Reddit 
Stumble It! 
