RBS  Royal Bank Scotland Group Plc

Exchange

NYSE

Sector

Finance

Industry

Commercial Banks

Market Cap.

44.95B

Current Price

$7.58
+0.05 (+0.66%)

Book Price

$11.96
Undervalued by 57.82%
Financial Institution

Company Metrics

  • P/E 0
  • P/S 2.55
  • P/B 0.69
  • EPS -0.89
  • Dividend 0 / 0%
  • Avg. Vol. 710,618.00
  • Shares 5.93B
  • Market Cap. 44.95B

Company Description

The Royal Bank of Scotland Group plc, through its subsidiaries, offers banking and financial services to personal, commercial, corporate, and institutional customers in the United Kingdom, the United States, and internationally. Its UK Retail segment offers banking products and related financial services to the personal market. The company's UK Corporate segment provides banking, finance, and risk... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Royal Bank Of Scotland Outlines Further Steps On Ring-Fencing Plans
Interactive Investor - 18 hours ago
LONDON (Alliance News) - Royal Bank Of Scotland Group PLC said Tuesday that the separation of banking services from investment banking services will take effect from January 1, 2019, in order to comply with the UK ring-fencing requirements.
Best stocks to buy: The Royal Bank of Scotland Group plc (NYSE:RBS) - The News Journal
HSBC Holdings PLC Raises The Royal Bank of Scotland Group plc (RBS) Price ... - StockNewsTimes
Why Royal Bank of Scotland Group plc is a top 'secret' growth stock
Motley Fool UK - Nov 15, 2017
This year has been a largely successful one for investors in RBS (LSE: RBS). The company's share price has risen by over 20%, which means it has outperformed the FTSE 100 by around 17% at the same time as the index has reached record highs.
Royal Bank of Scotland Group plc 2.8% Potential Upside Indicated by HSBC - DirectorsTalk Interviews
Why I'd buy and hold Royal Bank of Scotland Group plc for the next 2 decades - Yahoo Finance UK
Why I'd sell Royal Bank of Scotland Group plc to buy its fast-growing supplier
Motley Fool UK - Oct 27, 2017
The headline on the Financial Times article about Royal Bank of Scotland's (LSE: RBS) Q3 results this morning ran 'RBS swings into profit as bank draws line under financial crisis'. Yes, it took a mere decade but the bank is finally back in the black ...
RBS shares gain as it reports third consecutive quarter of profit on cost cuts - Proactive Investors UK
RBS to pay $44 million to settle US charges it defrauded customers - Reuters
Royal Bank of Scotland (RBS) Q3 Earnings: What's in Store?
Nasdaq - Oct 25, 2017
According to our quantitative model, it cannot be conclusively predicted if RBS will be able to beat the Zacks Consensus Estimate this time around.
RBS to wrap up week of banking results on Friday
Proactive Investors UK - Oct 26, 2017
Following a £4.2bn payment to the Federal Housing Finance Agency in July to settle claims it mis-sold billions of dollars' worth of toxic mortgage-backed bonds in the lead up to the financial crisis, RBS is facing a bigger fine from the US Department ...
Friday preview: RBS, IAG and Shire results, US GDP later - DIGITALLOOK
Brexit-Hit Banks to Start Moving Staff Abroad in Early 2018
Bloomberg - Nov 21, 2017
With Brexit talks deadlocked for months, firms including Goldman Sachs Group Inc., Morgan Stanley, UBS Group AG and Royal Bank of Scotland Group Plc will start moving people, infrastructure and capital into their new trading hubs inside the bloc in the ...
Royal Bank of Scotland Group plc isn't the only new stock Neil Woodford has bought
Motley Fool UK - Nov 14, 2017
Neil Woodford has been highly active in buying and selling stocks during 2017. Indeed, it's many a long year since his funds have undergone such a dramatic shift.
Royal Bank of Scotland Group plc (RBS) PT Raised to GBX 300 at Berenberg Bank
The Ledger Gazette - Nov 17, 2017
Royal Bank of Scotland Group plc logo Royal Bank of Scotland Group plc (LON:RBS) had its price objective increased by Berenberg Bank from GBX 275 ($3.62) to GBX 300 ($3.95) in a research note published on Monday, October 30th.
HSBC Holdings PLC Increases Royal Bank of Scotland Group plc (RBS) Price ... - The Lincolnian Online
Royal Bank of Scotland Group plc (RBS) Shares Down 0% - Dispatch Tribunal
Royal Bank of Scotland Group's (RBS) CEO Ross McEwan on Q3 2017 Results ...
Seeking Alpha - Oct 27, 2017
Today, I'll provide a brief overview of the bank's financial performance. And then Ewen and I are happy to take any questions.
Royal Bank Of Scotland Group Plc Lowered Holding in Intuit (INTU) by $430320 ...
BZ Weekly - 14 hours ago
Royal Bank Of Scotland Group Plc who had been investing in Intuit for a number of months, seems to be less bullish one the $38.98B market cap company.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for RBS to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate RBS's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

Poor Cash Return on Invested Capital over the past 5 years

RBS has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

RBS has only created $- of cash for every $100 invested.
Figures in GBP. Fiscal year ends in December
20122013201420152016
Free Cash Flow - - - - -
divided by
Invested Capital 1.31T 1.03T 1.05T 815.41B 798.66B
Cash ROIC - - - - -

Very Poor Return on Equity over the past 5 years

RBS has shown an inability to deliver results for shareholders. This could be due to poor management, RBS operating in a highly competitive industry, or having a weak business in general.

RBS has generated a $8.32 loss for every $100 of Shareholders' Equity.
Figures in GBP. Fiscal year ends in December
20122013201420152016
Net Income -5.68B -8.60B -2.77B -1.59B -5.26B
divided by
Stockholders' Equity 68.13B 58.74B 57.25B 53.43B 48.61B
Return on Equity -8.34% -14.64% -4.84% -2.98% -10.82%

Poor Business Performance over the past 10 years

RBS's inability to produce positive free cash flow for the majority of the past 10 years is concerning. It should be a red flag, since this company does not have a track record of delivering results for shareholders. This could be due to poor management or the nature of its business.

RBS has been losing money for the majority of the past 10 years.
Figures in GBP. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow - - - - - - - - - -

Low or No Reinvestment of Profits over the past 10 years

RBS has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to RBS operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in GBP. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 21.07B 7.54B 12.13B - 18.93B 10.60B - -2.52B -4.02B -12.94B
Retained Earnings Growth - -64.21% 60.89% -100.00% - -44.02% -100.00% - -59.65% -221.79%

Highly Competitive Industry over the past 10 years

It's likely that RBS is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely RBS invests heavily in R&D and Sales, General & Administrative expenses.

Only $- of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in GBP. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 7.30B -24.14B -3.61B -1.13B -2.00B -5.68B -8.60B -2.77B -1.59B -5.26B
divided by
Revenue - - - - - - - - - -
Net Profit Margin - - - - - - - - - -

Weak Pricing Power over the past 10 years

RBS is likely in a highly competitive industry, due to low barriers to entry. It's because of this, that RBS has been unable to raise prices and increase their profitability. This puts them in a poor position if inflation becomes an issue, as they would struggle to pass higher costs onto consumers.

Only $- of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in GBP. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit - - - - - - - - - -
divided by
Revenue - - - - - - - - - -
Gross Margin - - - - - - - - - -

Low Capital Intensity over the past 10 years

RBS has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that RBS may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

-% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in GBP. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure - - - - - - - - - -
divided by
Net Income 7.30B -24.14B -3.61B -1.13B -2.00B -5.68B -8.60B -2.77B -1.59B -5.26B
Capital Expenditure Ratio - - - - - - - - - -

Very Strong Dividend History over the past 10 years

RBS has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests RBS is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in GBP. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 3.41B 3.19B 1.25B 4.24B 40.00M 301.00M 403.00M 383.00M 416.00M 504.00M
divided by
Shares Outstanding 498.30M 828.15M 2.67B 5.36B 5.41B 5.50B 5.60B 5.72B 5.79B 5.87B
Dividend Paid Per Share 10.86 6.12 0.74 1.25 0.01 0.09 0.11 0.11 0.11 0.14
Price at Year End - - - 14.79 11.20 10.41 11.26 12.06 8.94 5.53
Dividend Yield - - - 8.49% 0.10% 0.83% 1.01% 0.88% 1.28% 2.46%

No History of Stock Buybacks over the past 10 years

We're neutral on this. It's not necessarily good or bad that RBS hasn't initiated a stock buyback.
Figures in GBP. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 498.30M 828.15M 2.67B 5.36B 5.41B 5.50B 5.60B 5.72B 5.79B 5.87B
Stock Bought Back - -39.83% -68.94% -50.27% -0.90% -1.64% -1.73% -2.19% -1.11% -1.42%
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