LSE:RBS

Stock Analysis Report

Royal Bank of Scotland Group

Executive Summary

The Royal Bank of Scotland Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers worldwide.


Snowflake Analysis

Undervalued with proven track record and pays a dividend.


Similar Companies

Share Price & News

How has Royal Bank of Scotland Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RBS's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

5.6%

RBS

-1.4%

GB Banks

6.2%

GB Market


1 Year Return

-51.4%

RBS

-33.5%

GB Banks

-22.7%

GB Market

Return vs Industry: RBS underperformed the UK Banks industry which returned -33.5% over the past year.

Return vs Market: RBS underperformed the UK Market which returned -22.7% over the past year.


Shareholder returns

RBSIndustryMarket
7 Day5.6%-1.4%6.2%
30 Day-32.7%-22.0%-17.8%
90 Day-50.3%-34.6%-27.7%
1 Year-44.4%-51.4%-28.8%-33.5%-18.6%-22.7%
3 Year-40.3%-50.4%-32.0%-41.3%-13.4%-24.6%
5 Year-58.7%-65.6%-29.7%-43.8%1.3%-22.0%

Price Volatility Vs. Market

How volatile is Royal Bank of Scotland Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Royal Bank of Scotland Group undervalued compared to its fair value and its price relative to the market?

44.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RBS (£1.2) is trading below our estimate of fair value (£2.18)

Significantly Below Fair Value: RBS is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RBS is good value based on its PE Ratio (4.6x) compared to the Banks industry average (4.6x).

PE vs Market: RBS is good value based on its PE Ratio (4.6x) compared to the UK market (12.5x).


Price to Earnings Growth Ratio

PEG Ratio: RBS's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: RBS is good value based on its PB Ratio (0.3x) compared to the GB Banks industry average (0.5x).


Next Steps

Future Growth

How is Royal Bank of Scotland Group forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

-9.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RBS's earnings are forecast to decline over the next 3 years (-9.4% per year).

Earnings vs Market: RBS's earnings are forecast to decline over the next 3 years (-9.4% per year).

High Growth Earnings: RBS's earnings are forecast to decline over the next 3 years.

Revenue vs Market: RBS's revenue is expected to decline over the next 3 years (-2.1% per year).

High Growth Revenue: RBS's revenue is forecast to decline over the next 3 years (-2.1% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RBS's Return on Equity is forecast to be low in 3 years time (6.7%).


Next Steps

Past Performance

How has Royal Bank of Scotland Group performed over the past 5 years?

45.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RBS has a large one-off gain of £1.0B impacting its December 31 2019 financial results.

Growing Profit Margin: RBS's current net profit margins (25.1%) are higher than last year (12.8%).


Past Earnings Growth Analysis

Earnings Trend: RBS has become profitable over the past 5 years, growing earnings by 45.5% per year.

Accelerating Growth: RBS's earnings growth over the past year (93.2%) exceeds its 5-year average (45.5% per year).

Earnings vs Industry: RBS earnings growth over the past year (93.2%) exceeded the Banks industry 29.6%.


Return on Equity

High ROE: RBS's Return on Equity (8.7%) is considered low.


Next Steps

Financial Health

How is Royal Bank of Scotland Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: RBS has a low level of unsold assets or inventory.

Debt Coverage by Assets: RBS's debt is covered by short term assets (assets are 1.6x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: RBS is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: RBS is profitable, therefore cash runway is not a concern.


Financial Institutions Analysis

Asset Level: RBS's level of assets compared to its equity is moderate.

Allowance for Bad Loans: RBS has a low allowance for bad loans.

Low Risk Liabilities: RBS's liabilities are made up of primarily low risk sources of funding.

Loan Level: RBS has an acceptable proportion of non-loan assets held.

Low Risk Deposits: RBS's loans are broadly funded by customer deposits.

Level of Bad Loans: RBS has a high level of bad loans (2.06%)


Next Steps

Dividend

What is Royal Bank of Scotland Group's current dividend yield, its reliability and sustainability?

18.31%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: RBS's dividend (18.31%) is higher than the bottom 25% of dividend payers in the UK market (2.7%).

High Dividend: RBS's dividend (18.31%) is in the top 25% of dividend payers in the UK market (7.3%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, RBS has been paying a dividend for less than 10 years.

Growing Dividend: RBS's dividend payments have increased, but the company has only paid a dividend for 2 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (19.3%), RBS's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RBS's dividends in 3 years are forecast to be covered by earnings (65.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.4yrs

Average management tenure


CEO

Alison Rose-Slade (50yo)

0.33

Tenure

UK£1,401,000

Compensation

Ms. Alison Marie Rose-Slade, BA (Hons) has been the Chief Executive Officer of The Royal Bank of Scotland Group plc since November 1, 2019. Ms. Rose-Slade has been Executive Director at Royal Bank of Scotl ...


CEO Compensation Analysis

Compensation vs Market: Alison's total compensation ($USD1.74M) is below average for companies of similar size in the UK market ($USD5.57M).

Compensation vs Earnings: Insufficient data to compare Alison's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Alison Rose-Slade
Executive Director & CEO0.33yrUK£1.40m0.0023% £333.7k
Katie Murray
CFO & Executive Director1.17yrsUK£1.74m0.0024% £345.3k
Richard Fisher
Chief Accountantno datano datano data
Simon McNamara
Chief Administrative Officer6.5yrsno data0.0031% £446.9k
Alexander Holcroft
Head of Investor Relationsno datano datano data
Michael Shaw
Chief of Legal3.92yrsno datano data
David Wheldon
Chief Marketing Officer4.67yrsno data0.00032% £46.4k
Helen Cook
Chief HR Officer2.92yrsno data0.00074% £107.4k
Charles Harris
Global Head of Property Derivativesno datano datano data
Neil Moorhouse
Head of Group Media Centreno datano datano data

3.4yrs

Average Tenure

50yo

Average Age

Experienced Management: RBS's management team is considered experienced (3.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Alison Rose-Slade
Executive Director & CEO0.33yrUK£1.40m0.0023% £333.7k
Katie Murray
CFO & Executive Director1.17yrsUK£1.74m0.0024% £345.3k
Malcolm Buchanan
Managing Director of Corporate & Commercial Banking In Scotland and Chair of Scotland Board4.33yrsno datano data
Bruce Van Saun
Head of RBS Americas6.42yrsUK£992.00kno data
Mark Seligman
Senior Independent Director2.17yrsUK£205.00k0.00025% £36.3k
Sheila Noakes
Independent Non-Executive Director8.58yrsUK£222.00k0.00034% £49.3k
Robert Andrew Gillespie
Independent Non-Executive Director6.25yrsUK£246.00k0.00021% £30.5k
Howard Davies
Chairman of the Board4.5yrsUK£761.00k0.00083% £120.4k
Patrick Flynn
Independent Non-Executive Director1.75yrsUK£233.00k0.00017% £24.7k
Alison Davis
Independent Non-Executive Director8.58yrsUK£224.00k0.00017% £24.7k

4.4yrs

Average Tenure

62yo

Average Age

Experienced Board: RBS's board of directors are considered experienced (4.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: RBS insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

The Royal Bank of Scotland Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Royal Bank of Scotland Group plc
  • Ticker: RBS
  • Exchange: LSE
  • Founded: 1727
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: UK£14.510b
  • Shares outstanding: 12.08b
  • Website: https://www.rbs.com

Number of Employees


Location

  • The Royal Bank of Scotland Group plc
  • 175 Glasgow Road
  • Edinburgh
  • EH12 1HQ
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RBSP.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDSep 1989
RBSLSE (London Stock Exchange)YesOrdinary SharesGBGBPSep 1989
RYS1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURSep 1989
RYSXTRA (XETRA Trading Platform)YesOrdinary SharesDEEURSep 1989
RBSLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPSep 1989
RBSSWX (SIX Swiss Exchange)YesOrdinary SharesCHCHFSep 1989
RBS PRFCLNYSE (New York Stock Exchange)SPON ADR FUSUSDApr 1997
RBS PRRCLNYSE (New York Stock Exchange)ADR PREF SHS RUSUSDJan 2007
A0TKTZDB (Deutsche Boerse AG)PERP SR -U NTDEEUROct 2007
RBSNYSE (New York Stock Exchange)ADR EACH REPR 2 ORD GBP0.25USUSDOct 2007
RYS2DB (Deutsche Boerse AG)ADR EACH REPR 2 ORD GBP0.25DEEUROct 2007

Biography

The Royal Bank of Scotland Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers worldwide. It operates through UK Personal Banking, Ulster Bank RoI, Commercial Banking, Private Banking, RBS International, NatWest Markets, and Central Items & Other segments. The company offers savings and current accounts; reward accounts and cards, as well as credit and business cards; personal, car, home improvement, debt consolidation, holiday, and wedding loans; overdrafts; mortgages; investments; trade finance; payment services; business services; and insurance products. It also provides wealth management, financial planning, investment management, asset and project finance, and offshore banking services; and financing and risk solutions, as well as trading and flow sales services. The Royal Bank of Scotland Group plc was founded in 1727 and is headquartered in Edinburgh, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/29 20:37
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.