RBS share price: Investment trust manager points to positive outlook for bank

on Jul 29, 2016
Updated: Oct 21, 2019

Royal Bank of Scotland Group (LON:RBS) has had a difficult year but capital strength and restructuring of underperforming units make for a positive outlook, an investment trust manager has said. The comments are a boost for the bailed-out lender which has been struggling to return to profitability after its massive taxpayer-funded bailout during the financial crisis.

RBS’ share price has jumped in London this morning, having gained 2.77 percent to 193.20p as of 10:25 BST, outperforming the blue-chip FTSE 100 index which has slipped into negative territory and currently stands 0.22 percent in the red at 6,706.13 points. The group’s shares have lost some 45 percent of their value over the past year, and are down by more than 36 percent in the year-to-date.
Citywire reported yesterday that Phillip Matthews, manager of Schroder UK Growth investment trust, was sticking with RBS, arguing that there was a positive outlook for the blue-chip bank which has had a difficult year.

“We remain positive, given the strength of its capital position and its strong domestic retail and commercial franchises which we believe will become increasingly apparent as the group restructures the underperforming Ulster, investment and private banking divisions,” he said, as quoted by the newswire, adding that RBS had “endured a tough 12 months of share price performance”.
JPMorgan Chase & Co meanwhile remains ‘underweight’ on RBS, with a price target of 185p on the stock. BNP Paribas continues to see the bailed-out lender as a ‘neutral,’ valuing the shares at 200p.
RBS is scheduled to update investors on its interim performance on August 5. The results will follow bailed-out peer Lloyds’ (LON:LLOY) half-year update, with the group saying yesterday that the outcome of last month’s Brexit referendum might weigh on its capital generation going forward.
As of 10:39 BST, Friday, 29 July, Royal Bank of Scotland Group share price is 192.30p.