RBS share price: FCA in final stages of report on bank’s business clients

Deutsche Bank reiterates ‘hold’ rating ahead of bailed-out lender’s results

RBS share price: FCA in final stages of report on bank’s business clients

The Financial Conduct Authority (FCA) is in the final stages of completion of its keenly-awaited review of alleged mistreatment of business customers by Royal Bank of Scotland Group (LON:RBS), Reuters has reported. The news comes ahead of RBS’ first-quarter results later this week.

RBS’ share price surged in yesterday’s session, adding 1.65 percent to close at 252.40p, outperforming the broader London market. The group’s shares have lost some 28 percent of their value over the past year.

Reuters reported yesterday that after delaying the report into RBS’ treatment of business customers from the end of 2015, the FCA said that it was in the final stages of completion. The City watchdog, however, did not provide a publication date.

“We are in the latter stages of the review,” the newswire quoted FCA acting Chief Executive Tracey McDermott as telling parliament’s Treasury Select Committee. The bailed-out lender has been accused of pushing viable firms into its turnaround unit, Global Restructuring Group (GRG), so that it could seize their assets on the cheap.

The Guardian meanwhile reported that small businesses alleging that the bailed-out lender drove them to the wall for its own profit are to lodge claims worth more than £1 billion against RBS after securing legal and financial backing. RGL Management, formed to gather claims against RBS over the conduct of its now defunct GRG, has reportedly processed 50 claimants less than a month after its launch.

In a separate development, analysts at Deutsche Bank retained their ‘hold’ recommendation on the UK group, and trimmed their price target from 248p to 241p.

“Longer term it is clear to us that RBS will be a significant dividend/buy-back-payer, though dividends, when they do start, are likely to be relatively modest at the beginning as they were at Lloyds,” the bank’s analyst said, as quoted by Citywire. “However, it is also increasingly clear that for the next 12-18 months RBS will not be able to distribute capital, and needs to run at a higher common equity tier ratio for longer while it waits for the Williams & Glyn exit and settlement of residential mortgage-backed securities to complete.”

The comments come ahead of RBS’ first-quarter results on Friday, while bailed-out peer Lloyds Banking Group (LON:LLOY) reports tomorrow.

As of 07:58 BST, Wednesday, 27 April, Royal Bank of Scotland Group share price is 252.40p.

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