NATWEST GROUP (NWG)

Sector:

Banking

Index:

FTSE 100

265.50p
   
  • Change Today:
      2.70p
  • 52 Week High: 275.80
  • 52 Week Low: 176.15
  • Currency: UK Pounds
  • Shares Issued: 8,890m
  • Volume: 18,727,676
  • Market Cap: £23,603m
  • RiskGrade: 62

Jefferies jacks up RBS target in anticipation of 'large scale capital return'

By Alexander Bueso

Date: Monday 25 Mar 2019

LONDON (ShareCast) - (Sharecast News) - Analysts at Jefferies jacked up their target price for shares of RBS following a meeting with the lender's finance chief, Katie Murray, that saw them come away with "more conviction than ever around large scale capital return".
Following their discussion with Murray, the analysts penciled-in £1.3bn-worth of buybacks and a corresponding reduction in the lender's share count that saw their 2021 based target price rise from 341p to 489p.

That share count reduction accounted for 123p of the bump-up in their target price.

"However unlikely in practice," the analysts said, RBS's finance director had emphasised the ability to purchase an additional 10% of shares on the open market "prospectively meaning that RBS could buyback up to 14.99% of its shares in a year".

On the asset side of the equation, the analysts said it was reasonable to anticipate stable net interest margins even if the hike in Bank Rate that was projected to take place in the third or fourth quarter of 2019 was pushed into the following year.

Each 25 basis point rate hike from the Bank of England was equivalent to £250m of incremental revenues over the subsequent 12 months, they estimated.

"As an asset sensitive bank, RBS's revenue would be supported by higher base rates and we believe at least two 25bps rate hikes are needed to drive a 2021 C/I meaningfully below 50%," they added.

Things were also looking up on the other side of the lender's balance sheet, Jefferies said, pointing to the fact that in just the first quarter RBS had completed more than half of the MREL issuance planned for the entire fiscal year, with spreads in-line with the levels seen last June, when the lender had last funded, and the decision to call a €1.0bn Tier 2 3.625% note.

"This positive backdrop on the credit side bodes well for the equity story, in our opinion."

Jefferies stood by its previous 'buy' recommendation on RBS shares.



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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

RBS Market Data

Currency UK Pounds
Share Price 265.50p
Change Today 2.70p
% Change 1.03 %
52 Week High 275.80
52 Week Low 176.15
Volume 18,727,676
Shares Issued 8,890m
Market Cap £23,603m
RiskGrade 62

RBS Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
89.42% above the market average89.42% above the market average89.42% above the market average89.42% above the market average89.42% above the market average
5.88% below the sector average5.88% below the sector average5.88% below the sector average5.88% below the sector average5.88% below the sector average
Price Trend
61.49% above the market average61.49% above the market average61.49% above the market average61.49% above the market average61.49% above the market average
17.65% below the sector average17.65% below the sector average17.65% below the sector average17.65% below the sector average17.65% below the sector average
Income
94.20% above the market average94.20% above the market average94.20% above the market average94.20% above the market average94.20% above the market average
33.33% above the sector average33.33% above the sector average33.33% above the sector average33.33% above the sector average33.33% above the sector average
Growth
64.00% above the market average64.00% above the market average64.00% above the market average64.00% above the market average64.00% above the market average
5.88% above the sector average5.88% above the sector average5.88% above the sector average5.88% above the sector average5.88% above the sector average

What The Brokers Say

Strong Buy 5
Buy 6
Neutral 2
Sell 2
Strong Sell 1
Total 16
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

RBS Dividends

  Latest Previous
  Final Interim
Ex-Div 14-Mar-24 10-Aug-23
Paid 29-Apr-24 15-Sep-23
Amount 11.50p 5.50p

Trades for 28-Mar-2024

Time Volume / Share Price
16:35 10,212,245 @ 265.50p
16:35 1,608 @ 265.50p
16:35 9,634 @ 265.50p
16:35 18,188 @ 265.50p
16:35 9,499 @ 265.50p

RBS Key Personnel

Chair Howard Davies
CEO Paul Thwaite

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