RBS  Royal Bank Scotland Group Plc

Exchange

NYSE

Sector

Finance

Industry

Commercial Banks

Market Cap.

71.53B

Current Price

$6.06
+0.02 (+0.33%)

Book Price

$12.00
Undervalued by 98.01%
Financial Institution

Company Metrics

  • P/E 0
  • P/S 4.7
  • P/B 0.59
  • EPS -1.47
  • Dividend 0 / 0%
  • Avg. Vol. 1.32M
  • Shares 5.87B
  • Market Cap. 71.53B

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 reportedly offers bigger settlement to remaining claimants in rights issue ...
Proactive Investors UK - Mar 28, 2017
Royal Bank of Scotland Group plc (LON:RBS) has reportedly offered to pay millions of pounds to settle legal action over its 2008 rights issue.
Royal Bank of Scotland Group PLC (RBS) Stock Rating Upgraded by Investec - Chaffey Breeze
Royal Bank of Scotland Group plc (RBS) Rating Lowered to Neutral at Goldman ... - The Cerbat Gem
Royal Bank of Scotland Group cuts almost 700 jobs as it closes 180 UK, Irish ...
Financial Express - Mar 23, 2017
Royal Bank of Scotland Group Plc is eliminating about 690 jobs and closing 180 U.K. and Irish branches as Britain's largest taxpayer-owned lender trims costs after a near-decade of losses.
Royal Bank of Scotland to Close 180 Branches in UK, Ireland - Zacks.com
RBS to close more than 150 branches, hundreds of job losses as digital banking ... - Proactive Investors UK
Ticker Scope: Watching Shares of The Royal Bank of Scotland Group plc (LSE:RBS)
The Standard - 15 hours ago
Interested investors may be tracking the Piotroski F-Score. The Royal Bank of Scotland Group plc (LSE:RBS) currently has a Piotroski F-Score of 1. The aim of the F-Score is to help discover companies with strengthening balance sheets, and to eliminate ...
Royal Bank of Scotland Group plc - Receive News & Ratings Daily
BBNS - 9 hours ago
Royal Bank of Scotland Group plc logo BNP Paribas upgraded shares of Royal Bank of Scotland Group plc (LON:RBS) to a neutral rating in a report issued on Friday.
Will the Lloyds share price outperform RBS and Prudential in 2017? - Investomania (blog)
Technical Trading: Focus on Shares of Royal Bank of Scotland Group PLC (RBS)
Rives Journal - 2 hours ago
Watching some technicals on shares of Royal Bank of Scotland Group PLC (RBS), the 50-day Moving Average is 5.87, the 200-day Moving Average is 5.3, and the 7-day is noted at 5.97.
Royal Bank of Scotland Group plc 18.5% Potential Decrease Indicated by Exane ...
DirectorsTalk Interviews - Mar 16, 2017
Royal Bank of Scotland Group plc using EPIC/TICKER code LON:RBS had its stock rating noted as 'Reiterates' with the recommendation being set at 'UNDERPERFORM' this morning by analysts at Exane BNP Paribas.
Royal Bank of Scotland Group plc (RBS) Receives “Underperform” Rating from BNP ... - Chaffey Breeze
Stock in Action: The Royal Bank of Scotland Group plc (RBS) - StandardOracle
Market Risers: NEXT plc, Persimmon plc, Royal Bank of Scotland Group plc ...
DirectorsTalk Interviews - Mar 23, 2017
The share price for Royal Bank of Scotland Group plc with EPIC code: LON:RBS has risen 1.62% or 3.8 points during today's session so far.
Latest Stocks: The Royal Bank of Scotland Group plc (RBS) Receives ... - Petro Global News 24
BNP Paribas Reaffirms Underperform Rating for Royal Bank of Scotland Group plc ... - Sports Perspectives
Royal Bank of Scotland Group plc 14.7% Potential Upside Indicated by Goldman Sachs
DirectorsTalk Interviews - Mar 8, 2017
Royal Bank of Scotland Group plc using EPIC/TICKER code LON:RBS had its stock rating noted as 'Downgrades' with the recommendation being set at 'NEUTRAL' today by analysts at Goldman Sachs.
Analysts Speculate on: Royal Bank of Scotland Group PLC (NYSE:RBS)
Post Registrar - Mar 20, 2017
Royal Bank of Scotland Group PLC (NYSE:RBS) rose 1.34% during previous trade. Natixis Bleichroeder issued rating on the stock of Royal Bank of Scotland Group PLC (NYSE:RBS) in a research note issued to investors on Mar-17-17, the stock received ...
Short Interest in Royal Bank of Scotland Group PLC (RBS) Rises By 34.8% - Chaffey Breeze
Berenberg Upgrades the shares of The Royal Bank of Scotland Group plc (RBS) to Buy - HugoPress
Big UK Banks to Face Tougher 2017 Stress Test Scenarios
Zacks.com - 23 hours ago
All the major seven U.K. banks - Barclays plc (BCS - Free Report) , HSBC Holdings plc (HSBC - Free Report) , Lloyds Banking Group plc (LYG - Free Report) , Nationwide Building Society, The Royal Bank of Scotland Group plc (RBS - Free Report) ...
UK's Biggest Banks Tested for Deep Recession in BOE Scenarios - Bloomberg
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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