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

Fundamentals

Adequate balance sheet average dividend payer.


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


Market Performance


7 Day Return

11.9%

RBS

5.4%

GB Banks

2.0%

GB Market


1 Year Return

-10.5%

RBS

-4.1%

GB Banks

3.3%

GB Market

Return vs Industry: RBS underperformed the UK Banks industry which returned -4.1% over the past year.

Return vs Market: RBS underperformed the UK Market which returned 3.3% over the past year.


Share holder returns

RBSIndustryMarket
7 Day11.9%5.4%2.0%
30 Day4.6%0.4%-1.0%
90 Day-4.8%-5.9%-1.7%
1 Year0.4%-10.5%1.9%-4.1%8.3%3.3%
3 Year43.0%26.3%14.3%-0.8%19.0%4.5%
5 Year-28.4%-36.7%3.0%-17.5%38.4%8.4%

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 based on future cash flows and its price relative to the stock market?

19%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Undervalued: RBS (£2.18) is trading below our estimate of fair value (£2.68)

Significantly Undervalued: RBS is trading below fair value, but not by a significant amount.


Price Based on Earnings

PE vs Industry: RBS is poor value based on its PE Ratio (9.5x) compared to the Banks industry average (8.8x).

PE vs Market: RBS is good value based on its PE Ratio (9.5x) compared to the UK market (16.4x).


Price Based on Expected Growth

Low PEG Ratio: RBS is poor value based on its PEG Ratio (1.3x)


Price Based on Value of Assets

PB vs Industry: RBS is good value based on its PB Ratio (0.6x) compared to the GB Banks industry average (0.8x).


Next Steps

Future Growth

How is Royal Bank of Scotland Group expected to perform in the next 1 to 3 years based on estimates from 20 analysts?

7.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: RBS's forecast earnings growth (7.5% per year) is above the savings rate (1.2%).

Earnings vs Market: RBS's earnings (7.5% per year) are forecast to grow slower than the UK market (12.3% per year).

High Growth Earnings: RBS's earnings are forecast to grow, but not significantly.

Revenue vs Market: RBS's revenue (0.5% per year) is forecast to grow slower than the UK market (4% per year).

High Growth Revenue: RBS's revenue (0.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: RBS's Return on Equity is forecast to be low in 3 years time (8.2%).


Next Steps

Past Performance

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

44.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: RBS has become profitable over the past 5 years, growing earnings by 44% per year.

Accelerating Growth: RBS's earnings growth over the past year (295.4%) exceeds its 5-year average (44% per year).

Earnings vs Industry: RBS earnings growth over the past year (295.4%) exceeded the Banks industry 29.6%.


Return on Equity

High ROE: RBS's Return on Equity (7.6%) is considered low.


Return on Assets

ROA vs Industry: RBS's Return on Assets is below or equal to the Banks industry average last year.


Return on Capital Employed

ROCE Improving: Insufficient data to calculate RBS's Return on Capital Employed to determine if it has improved over the past 3 years.


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 1.627730x debt).


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 (2.34%)


Next Steps

Dividend

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

8.00%

Expected Dividend Yield


Dividend Yield vs Market

company8.0%marketbottom25%2.0%markettop25%5.4%industryaverage4.7%forecastin3Years8.0%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: RBS's dividend (8.02%) is higher than the bottom 25% of dividend payers in the UK market (2%).

High Dividend: RBS's dividend (8.02%) is in the top 25% of dividend payers in the UK market (5.42%)

Stable Dividend: Too early to tell whether RBS's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if RBS's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (23.9%), 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 well covered by earnings (49.7% payout ratio).


Next Steps

Management

What is the CEO of Royal Bank of Scotland Group's salary, the management and board of directors tenure and is there insider trading?

3.5yrs

Average management tenure


CEO

Ross McEwan (62yo)

6yrs

Tenure

UK£3,578,000

Compensation

Mr. Ross Maxwell McEwan, B.B.S. has been the Group Chief Executive Officer of The Royal Bank of Scotland Group Plc since October 1, 2013 and serves as Executive Director. Mr. McEwan joined Royal Bank of Sc ...


CEO Compensation Analysis

Compensation vs. Market: Ross's total compensation ($USD4.54M) is about average for companies of similar size in the UK market ($USD4.72M).

Compensation vs Earnings: Ross's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.5yrs

Average Tenure

54.5yo

Average Age

Experienced Management: RBS's management team is considered experienced (3.5 years average tenure).


Board Age and Tenure

5.0yrs

Average Tenure

62yo

Average Age

Experienced Board: RBS's board of directors are considered experienced (5 years average tenure).


Insider Trading

Insider Buying: RBS insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUK£13,21014 Aug 19
David Wheldon
EntityIndividual
Role
Head of Marketing
Chief Marketing Officer
Shares6,514
Max PriceUK£2.03
SellUK£29,35514 Aug 19
Vanessa Bailey
EntityIndividual
Shares14,475
Max PriceUK£2.03
SellUK£14,38514 Aug 19
Helen Cook
EntityIndividual
Role
Head of Human Resources
Chief HR Officer
Shares7,093
Max PriceUK£2.03
SellUK£58,70914 Aug 19
Christopher Marks
EntityIndividual
Shares28,949
Max PriceUK£2.03
SellUK£38,97214 Aug 19
Simon McNamara
EntityIndividual
Role
Chief Administrative Officer
Chief Administrative Officer
Shares19,217
Max PriceUK£2.03
SellUK£49,90114 Aug 19
Alison Rose-Slade
EntityIndividual
Shares24,606
Max PriceUK£2.03
SellUK£35,22414 Aug 19
Bruce Fletcher
EntityIndividual
Shares17,369
Max PriceUK£2.03
SellUK£46,96614 Aug 19
Mark Bailie
EntityIndividual
Role
Chief Operating Officer
Chief Operating Officer
Shares23,159
Max PriceUK£2.03
SellUK£35,97514 Aug 19
Lesile Matheson
EntityIndividual
Shares17,739
Max PriceUK£2.03
BuyUK£15001 Apr 19
Christopher Marks
EntityIndividual
Shares60
Max PriceUK£2.50
BuyUK£15001 Apr 19
Katie Murray
EntityIndividual
Role
Member of the Board of Directors
CFO & Executive Director
Shares60
Max PriceUK£2.50
SellUK£657,02022 Feb 19
Christopher Marks
EntityIndividual
Shares260,000
Max PriceUK£2.53
BuyUK£15029 Jan 19
Christopher Marks
EntityIndividual
Shares62
Max PriceUK£2.41
BuyUK£15130 Nov 18
Christopher Marks
EntityIndividual
Shares68
Max PriceUK£2.22
BuyUK£228,85330 Oct 18
Ross McEwan
EntityIndividual
Role
Chief Executive Officer
CEO & Executive Director
Shares99,458
Max PriceUK£2.30
BuyUK£90,12930 Oct 18
Howard Davies
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares39,000
Max PriceUK£2.31

Ownership Breakdown


Management Team

  • Mark Bailie (46yo)

    Chief Operating Officer

    • Tenure: 3.5yrs
  • David Wheldon

    Chief Marketing Officer

    • Tenure: 4.3yrs
  • Charles Harris

    Global Head of Property Derivatives

    • Tenure: 0yrs
  • Ross McEwan (62yo)

    CEO & Executive Director

    • Tenure: 6yrs
    • Compensation: UK£3.58m
  • Michael Shaw

    Chief of Legal

    • Tenure: 3.5yrs
  • Katie Murray (50yo)

    CFO & Executive Director

    • Tenure: 0.8yrs
  • Simon McNamara (59yo)

    Chief Administrative Officer

    • Tenure: 6.1yrs
  • Helen Cook

    Chief HR Officer

    • Tenure: 2.5yrs
  • Richard Fisher

    Chief Accountant

    • Tenure: 0yrs
  • Alexander Holcroft

    Head of Investor Relations

    • Tenure: 0yrs

Board Members

  • Bruce Van Saun (62yo)

    Head of RBS Americas

    • Tenure: 6yrs
    • Compensation: UK£992.00k
  • Mark Seligman (63yo)

    Senior Independent Director

    • Tenure: 1.8yrs
    • Compensation: UK£176.00k
  • Sheila Noakes (69yo)

    Non-Executive Director

    • Tenure: 8.2yrs
    • Compensation: UK£234.00k
  • Robert Andrew Gillespie (64yo)

    Non-Executive Director

    • Tenure: 5.8yrs
    • Compensation: UK£227.00k
  • Howard Davies (68yo)

    Chairman of the Board

    • Tenure: 4.1yrs
    • Compensation: UK£761.00k
  • Patrick Flynn (59yo)

    Non-Executive Director

    • Tenure: 1.3yrs
    • Compensation: UK£110.00k
  • Alison Davis (58yo)

    Non-Executive Director

    • Tenure: 8.2yrs
    • Compensation: UK£226.00k
  • Ross McEwan (62yo)

    CEO & Executive Director

    • Tenure: 6yrs
    • Compensation: UK£3.58m
  • Katie Murray (50yo)

    CFO & Executive Director

    • Tenure: 0.8yrs
  • Malcolm Buchanan

    Managing Director of Corporate & Commercial Banking In Scotland and Chair of Scotland Board

    • Tenure: 3.9yrs

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£26.364b
  • 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
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 oper ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/13 20:34
End of Day Share Price2019/10/11 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.

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