RBS share price nosedives as Brexit selloff continues
Shares in Royal Bank of Scotland Group (LON:RBS) have lost more than a fifth of their value in today’s session, plunging to their lowest level since 2009, with investors digesting the UK’s vote to leave the European Union. Analysts at Societe Generale meanwhile turned bearish on the bailed-out lender on account of the group’s lower level of profitability.
As of 13:31 BST, RBS’ share price had lost 22.84 percent to stand at 158.40p, with volatility causing the stock to be briefly suspended in early trade. The shares have drifted below 164.4p, or the lowest level since January 2009.
Financial stocks have continued to lead the broader market lower today in the wake of last week’s referendum. Shares in RBS have been further pressured after analysts at Societe Generale cut their rating on the stock to ‘sell’.
“After a surprise Brexit vote, we adjust our UK bank forecasts and recommendations,” the analysts said, as quoted by the Guardian. “We lower RBS from hold to sell, given that its lower level of profitability gives it less scope to absorb bumps in the road.”
RBS, which was rescued by the UK government during the financial crisis, has been struggling to return to profitability with costs for restructuring and past misconduct continuing to weigh on the group’s performance. The company is also facing problems with the separation of its Williams & Glyn business, which it needs to offload by the end of next year as a condition of European Commission rules for receiving a bailout. The Financial Times noted today that even though the UK has voted to leave Europe, RBS is expected to still attempt to sell the business, with the deal remaining in place since it was made before the decision to leave the EU.
As of 14:00 BST, Monday, 27 June, Royal Bank of Scotland Group share price is 185.10p.