RBS share price: Berenberg sees capital returns possible next year

on May 19, 2017
Updated: Oct 21, 2019

Capital returns at Royal Bank of Scotland Group (LON:RBS) are ‘possible’ next year, analysts at Berenberg have said, as they reiterated their bullish stance on the stock. The comments are a boost for the bank, which has been struggling to return to profitability following its taxpayer-funded rescue during the financial crisis.

RBS’ share price has climbed into positive territory in today’s session, having added 0.38 percent to 264.40p as of 14:19 BST, largely in line with the broader UK market, with the benchmark FTSE 100 index currently 0.34 percent better off at 7,461.41 points. The group’s shares have added more than 16 percent to their value over the past year, and are up by some 17 percent in the year-to-date.

Analysts at Berenberg reiterated their ‘buy’ rating on RBS yesterday, with a price target of 275p on the shares, arguing that capital returns were ‘possible’ next year, and that the lender’s core business was performing.
“Like its main peer, RBS has achieved an annual expansion of net interest margins,” the bank told clients, as quoted by The Times. “However, unlike Lloyds, this has not been achieved by venturing into higher-risk consumer credit lending.”

The comments are good news for the lender, which remains more than 70-percent owned by the UK government following its £45.5-billion bailout during the financial crisis. Earlier this week, news emerged that the Labour Party was planning to launch a consultation to break up RBS into smaller banks.
The 20 analysts offering 12-month price targets for RBS for the Financial Times have a median target of 240.00p on the shares, with a high estimate of 303.00p and a low estimate of 190.00p. As of May 12, the consensus forecast amongst 24 polled investment analysts covering the lender advises investors to hold their position in the company.
As of 14:46 BST, Friday, 19 May, Royal Bank of Scotland Group share price is 264.50p.

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