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RBS share price outperforms market ahead of third-quarter update

Shares in Royal Bank of Scotland Group (LON:RBS) have climbed higher in London in today’s session, ahead of the bailed-out lender’s third-quarter update tomorrow. The part government-owned bank will continue the banking reporting season after blue-chip peers Barclays (LON:BARC) and Lloyds (LON:LLOY).

As of 13:37 BST, RBS’ share price had added 0.69 percent to 232.30p, outperforming the broader UK market, with the benchmark FTSE 100 index having slipped marginally into the red and currently standing 0.06 percent lower at 6,958.91 points. The group’s shares have lost just under 17 percent of their value over the past year, as compared with about a 6.6-percent dip in the Footsie.

RBS to post third-quarter results

RBS is scheduled to post its third-quarter results tomorrow and Proactive Investors reports that UBS forecasts adjusted pre-tax profit of £1.29 billion, up from £1.25 billion a year ago, while adjusted income is expected to have edged up to £3.18 billion from £3.16 billion.

While the FTSE 100 group has turned around its financial performance, the broker reckons that the lender’s strategy of seeking improved market share in residential mortgages and opting out of the UK’s 0% balance transfer credit card sector leaves it more exposed to competitive pressures.

The results will come after earlier this month, RBS paid its first dividend to shareholders since the financial crisis when it was rescued by the UK taxpayer. 

Analysts on blue-chip lender

Shore Capital lifted its rating on RBS to ‘buy’ today, without specifying a price target on the shares, while Goldman Sachs, which sees the lender as ‘neutral,’ lowered its valuation on the stock from 320p to 300p. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 312.50p.

As of 14:00 BST, Thursday, 25 October, Royal Bank of Scotland Group share price is 232.30p.

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