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Owls
YAwn , Yawn!! As teh Nationalised banks will not be paying dividends , they will be retaining all the profit and recapitalising. Lending is very , very profitabe at the moment..Had you not noticed |
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Shelts - enjoy the bear market rally. We'll talk again when you are a little bit more contrite.
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there is a very big chance they will touch the 60 mark by the end of may or heres hoping any chance yes or no
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Feels to me that the rally is running out of steam. Think they could easily fall back more. Mid 30's. I for one wouldn't buy here.
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poor couple of days
41p :( still, got to think long term |
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correct touched a bulls eye yesterday
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Interim results tomorrow. I think they will rise dramatically.
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Makes a market. I think they will fall, but wish you all the best.
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Great Day
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they say least 2 years before bank on right track
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yes good solid day
Losses for q1 not as bad as first feared and hestor seems to be getting plenty of praise for action he is taking |
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Is it realistic to assume the shares being worth more than a pound within the next year?
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who knows, hope so :)
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They might be worth more than a pound in a year's time. However, the real question should be what will a pound be worth? Not a lot methinks.
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I would be very surprised if RBS shares got anywhere close to £1 within a year.
The business continues to take a meaty hit from this crisis, so there's no way I can see the shares going that high. Further write downs are inevitable, so the value of the company will continue to be eroded. There are no 56.365bn RBS shares in issue...in 2007 the figure was 16.7bn......the shareholding has been massively diluted RBS are also under instruction to shrink themselves, and retract from foreign markets. At their zenith they were generating pre-tax profits of £10bn.....when they finally shake off the problems in a few years, they'll be a shadow of their former selves.....so what sort of profit levels should be expected then? £5 to £6bn tops pre-tax? ...and once the bottom line figure of what is attributable to the shareholders is calculated you could be looking at £3 to £4bn left over. Of that, they will have to stash a load to boost their capital base for the future. When they get around to paying a dividend again, I suspect you'll be looking at 1 to 2p per share. At 47p a share now.....waiting 3 years or whatever it takes to get that far, this looks an unattractive play. If you want £1 a share, it'll have to come through a share consolidation :) |
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http://files.shareholder.com/downloads/RBS/613513065x0x289435/661419ec-3df4-4130-abba-dc95a3b7cca1/imsq109.pdf
I really think RBS will be back above £2 by the end of 2011. |
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The_LUFCwaffe, so what about the long run?
When they are back on track(3 years?) albeit operating on a smaller scale, how much do you think their shares would be worth then? |
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Formboy
In 3 years they'll probably still be 50p to 60p a share. Lloyds are likely to be destined to go no higher than 115p either. have a look at the terms and conditions of the issue of 'B' share that the government are taking in repect of the finanical support that is being exchanged. There is an automatic conversion of 'B' shares into ordinary shares which is triggered under certain market conditions.....and in the case of RBS that's at 65p a share, and the gov will pick up a right old wack of new stock if that happens. Further dilution could occur. |
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LUFC_waffe - I find you're guesstimates for price completely ill-informed and suggest nobody takes any notice. I don't want to combative or insulting, but thought it best to warn people who know no better, as your assumption that Lloyds won't make over 115 for however long will be blown out of the wate by the end of next week.
For future price indication, DYOR!!! But here is my assessment: RBS has 56bil ord shares in circa, making the company worth around half of that in £s at current prices. The assets on the books total over £2 trillion, with declining bad debts / write downs / impairments being noted in Q1 results. In 2007 the full year profit was £10b. IMO, will easily hit 75p before the Autumn |
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Spock
All estimates tend to be guesstimates..but they can only be made on the information available. I suggest you check again the terms and conditions regards the Asset Protection Scheme which RBS have agreed to. When this was announced it was reported that the Gov could take up to an 84% share in the bank (and potentially higher). They currently hold a 70% stake. The increase comes about due to a clause in the deal which automatically triggers a conversion of the 'B' shares. The Gov are subscribing to £13bn of 'B' shares....this money is is being held as capital by RBS. There is also an option for an additional £6.5bn The fee for setting up the asset protection schem is a further £6.5bn....which is being subscribed via a further issue of 'B' shares. The clause states that these 'B' shares will convert if the price of ordinary shares exceed 65p (per ordinary) share for a period of 20 days in any 30 day trading period ...the conversion price per 'B' share is 50p Now think of the potential impact of conversion, and why I don't think these shares will exceed 60p for a sustained period http://files.shareholder.com/downloads/RBS/0x0x275187/6a8117a7-67ed-4e39-a6af-458323f0dd82/RBS_News_2009_2_26_General_announcements.pdf |
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Spock
sorry. Regards Lloyds...that should be 150p, not 115p....as there is a clause in Lloyds Asset Protection Scheme agreement similar to that of RBS. The conversion price here is 115p, but triggered at 150p. |
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If you're a holder of RBS shares, it's probably worthwhile have a read of this.
http://www.rns-pdf.londonstockexchange.com/rns/5711w_-2007-5-14.pdf The crux of it, is basically at its peak RBS was worth c.£65bn....and it had shareholder equity of £40bn to £45. This is prior to the current financial crisis, with the onset of a hammering of equity funds and the subsequent collapse in share price. So can the share go that much higher without inflicting serious damage to the ordinary shareholders? Above 65p and there may be 95bn shares in circulation once the 'B' shares are converted....so assuming a 75p share price, the capitalisation is £71bn.....more than the business was worth at its peak! I don't think so. |
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LUFC - thanks for your replies - I totally understand where you're coming from now. My information and interpretation regarding the APS is that HMG are underwriting the most toxic assets so RBS won't go under. RBS themselves have divided this into their new non-core arm, with the aim of disposing as much as possible and reigning back their exposure internationally.
Taking that into account, and considering most of the group's businesses are performing very well, if the recession does continue to slow, provision for bad debts should start to decrease, meaning profitability should not be so far away - if it does, bad debt provision should return to pre-recession levels, and focus will return to profit. Without the loss from these bad debts, RBS would have posted over £2b profit for the quarter, 20% away from 2007 levels. I know Hester sounds bleak, but the capital injected recently by the G20 will start to really impact in the last half of this year. IMO the investment banking arms of the big boys will go into overdrive and 2010 will see growth, plus of course, inflation. Let me know what you think, I bought RBS recently, in the short term I belive there will be a pull-back, but long term, if indeed the worst of the recession has expired and bad debts don't escalate too much, I think the stock is a winner. |
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if only sir fred spent less money on wallpaper.
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LUFC - by the by, I sold up at 8.15am this morning as the HSBC US debt is climbing. Took a hit but not been savaged as would have happened if I had waited until now.
Thanks for your info, found it altered the colour of my rose-tinted glasses |
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Poor start today, but im sticking with it for the long term
Interested in where it will be in 2-3 years time £2+ hopefully :) |
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LUFC. Excellent analysis. You have said exactly what I think. If a scaled down RBS makes 80% of its peak profits and trades on a p/e of 10 the target prive on a diluted share basis is only around 70p.
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10 Pence here we come !!!!!!!!!
:^0 |
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sensible post bobby
you prat |
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Well said Step, there would have to be a fuse lit to the banks vaults for that to happen again
for what it's worth, I went back in today after the dow opened up at 39.75. My renewed confidence has arisen because of STAN performance today and the fact that some big Japanese banks report tomorrow. Asia looks the stongest market currently, so fingers crossed. |
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If you have invested your hard earned in this pile of poop then you deserve all you get.
Imo you'll be queuing up with all the other NRK numpties outside Government offices asking for your moneyback. When the American banks are revealed as bankrupt and when house prices slump further,down will go the prices of banks. All banks, are now one gigantic derivitives bet on house prices. And house prices have further to fall.... You'll be seething whilst eating your christmas dinner. :^0 |
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;)
going to have to do better than that bobby |
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well said spock,
Nothings for certain, just think for some idiot to come on and say he hopes people lose money is pathetic |
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probably had a rough day on the k
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Bbby
What do you think the stress tests were for! There are no banruptcies and no US bank is insolvent. UK banks are reigning in lending to anyone without security. Margins are up on anything from credit account overdrafts, Credit cards, Savings accounts. We will all inadvertantly pay for teh banks mistakes. When they are recapitalised which is happening at a rate of knotts, profit margins will remain high for years, guaranteeing massive profits for teh banks. In teh short term the banks that do not pay dividends. LLoyds, RBS will recapitalise quicker than other banks , ensuring that if you are capital growth on your shares you will get it. Steptoes. I am with you on this. Hold the shares. There may be some ups and downs but the worst appears to be well and truly over! |
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chisel 15 May 09:27
There are no banruptcies and no US bank is insolvent. :D what price can i have on this please? |
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Made a tidy profit in less than four hours trade time - sold @ 41.75, 5% profit -
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I do not want anyone to lose money thank you very much but as my post states from 3 weeks ago, the big bear rally has still got some legs to it, we need a 30 to 40% retracement of the bear wave 1 of Oct 07 to Mar 09 , my workings call for a 5 to 6 month rally to approx 10k dow, 5k ftse for wave 2 rally and then a wave 3 that scares the holy complacency out of any bulls for possibly a decade
at the peak of this wave 3 rally, expeect the brown/darling/geithner/bernanke bods to claim credit for saving the cisis and then.......... i dont want to scare anyone but all bear markets have rallys,,check out late 1930/1931 |
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please check out my mid Feb 09 call on Gold on "gold is doing well today thread", its not gonna go to the moon because a few savvy private investors want it to
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When a bank like RBS is too big to fail surely buying shares in them is a win-win situation?
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