RBS  Royal Bank Scotland Group Plc

Exchange

NYSE

Sector

Finance

Industry

Commercial Banks

Market Cap.

39.70B

Current Price

$6.72
-0.16 (-2.33%)

Book Price

$11.96
Undervalued by 78.02%
Financial Institution

Company Metrics

  • P/E 0
  • P/S 2.52
  • P/B 0.65
  • EPS -1.25
  • Dividend 0.00 / 0.00 %
  • Avg. Vol. 1.05M
  • Shares 5.91B
  • Market Cap. 39.70B

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

RBS likely to escape trial over rights issue after shareholders accept ...
Proactive Investors UK - 3 hours ago
Royal Bank of Scotland Group plc (LON:RBS) is likely to avoid a 14-week High Court trial after reaching a settlement with shareholders suing the bank over its 2008 rights issue.
RBS Investors Had 129 Million Reasons to Settle Share Suit - Bloomberg
RBS investors accept £200 million settlement - MarketWatch
Royal Bank of Scotland Group plc 9.4% Potential Upside Indicated by Goldman Sachs
DirectorsTalk Interviews - 2 hours ago
Royal Bank of Scotland Group plc using EPIC/TICKER code (LON:RBS) had its stock rating noted as 'Retains' with the recommendation being set at 'NEUTRAL' this morning by analysts at Goldman Sachs.
Royal Bank Of Scotland Group Plc Lifted Bed Bath & Beyond (BBBY) Holding By $1 ... - High Point Observer
RBS higher as investor lawsuit settlement news awaited, with the trial ...
Proactive Investors UK - May 24, 2017
Royal Bank of Scotland Group PLC (LON:RBS) was a good FTSE 100 riser in late morning trading, with shares up 1.6% to 269.1p as investors awaited news on a possible settlement deal over an investor lawsuit on claims they lost money in a 2008 rights ...
Citigroup Inc Increases Royal Bank of Scotland Group plc (RBS) Price Target to ... - The Cerbat Gem
What's Acceptable Profitability For The Royal Bank of Scotland Group plc (RBS ... - USA Commerce Daily
RBS court hearing adjourned for second day as it continues settlement talks on ...
Proactive Investors UK - May 23, 2017
Royal Bank of Scotland (LON:RBS) has been granted a second 24-hour adjournment on a high court trial as it continues to hold settlement talks with shareholders suing the lender over its 2008 rights issue.
Royal Bank of Scotland Group PLC (RBS) Stock Rating Lowered by Investec - The Cerbat Gem
RBS makes final settlement attempt with former investors on rights issue ...
Proactive Investors UK - May 15, 2017
The 72% state-backed bank has already reached settlements with four other claimant groups in recent months. The 27,000 members of the shareholder group were mostly ordinary retail investors who lost money after subscribing to the new RBS shares.
PRESS: RBS In Last-Ditch Legal Talks With Former Investors - Sky - London South East (registration) (blog)
Wish to know which stocks you need to buy?: The Royal Bank of Scotland Group ...
The News Journal - 2 hours ago
The Royal Bank of Scotland Group plc (NYSERBS), from the Financial sector exhibited a worth of $ 6.72 today, demonstrating a change in price of -2.33%.
RBS curbs executive pay and chairman defends legal costs at annual meeting
Proactive Investors UK - May 11, 2017
Royal Bank of Scotland Group (LON:RBS) said it will reduce the maximum long-term incentive plan by up to 40% amid calls by investors to restrain executive pay as lender continues to overhaul its business.
Royal Bank of Scotland Raises $3 Billion Via Note Issue - Fox Business
The Royal Bank of Scotland Group plc: AGM Statement - The Wall Street Transcript
Royal Bank of Scotland Group plc (RBS) PT Raised to GBX 290
Chaffey Breeze - 3 hours ago
Royal Bank of Scotland Group plc logo Royal Bank of Scotland Group plc (LON:RBS) had its target price hoisted by Macquarie from GBX 270 ($3.47) to GBX 290 ($3.73) in a report released on Friday, May 5th.
Quantum Capital Management Invests $107000 in Royal Bank of Scotland Group PLC ... - Sports Perspectives
Berenberg Bank Reiterates Buy Rating for Royal Bank of Scotland Group plc (RBS) - Stock Observer
Shore Cap analysts unmoved by RBS's better than they expected underlying ...
Proactive Investors UK - May 24, 2017
Analysts at Shore Capital have failed to be stirred by the recent better than expected underlying first quarter profit performance from Royal Bank of Scotland Group PLC (LON:RBS). In a note to clients, they said: “While this is encouraging, the ...
Two brokers raise price targets, estimates for both RBS and Lloyds after the ...
Proactive Investors UK - May 2, 2017
A pair of brokers raised their target prices for both Royal Bank of Scotland Group PLC (LON:RBS) and Lloyds Banking Group PLC ((LON:LLOY) today in the wake of last week's buoyant results from the two part-taxpayer owned lenders.
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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