RBS share price: Bailed-out lender seen as ‘compelling investment’

Raanan Agus, co-head of Goldman Sachs Investment Partners (GSIP), sees Royal Bank of Scotland Group (LON:RBS) as a ‘compelling investment’, Reuters has reported. The upbeat comments come at a time when the UK government is looking to trim its stake in the bailed-out lender, having shed 5.4 percent of its holding earlier this year.

RBS’ share price has been subdued in today’s session, having shed 0.31 percent to 322.20p as of 14:43 BST. The shares are slightly outperforming the benchmark FTSE 100 index which currently stands 0.60 percent down at 6,303.97 points.

Reuters today quoted Agus, co-head of Goldman Sachs’ hedge fund GSIP, as saying that shares in RBS were a ‘compelling investment’ and could almost double to 620p within three years. The newswire notes that GSIP has a long position in the bailed-out lender.

“From the largest bank in the world [...] RBS is becoming a highly focused UK retail and commercial bank in a domestic market with attractive returns,” Agus told the Sohn Investment Conference in Tel Aviv today.

RBS, rescued by the UK taxpayer during the financial crisis, has been cutting costs and trimming non-core assets to focus on its core market in the UK and Ireland. The lender, however, has been struggling to return to profitability, with past misconduct continuing to weigh on the company’s performance.

Agus’ comments echo those of Morgan Stanley which at the end of August forecast that the bailed-out lender flagged concerns over the time frame of the bank’s strategy to shift its focus back to retail and commercial banking in the UK.