Keep avoiding RBS, says The Share Centre
The Share Centre has warned that investors should continue to avoid Royal Bank of Scotland after the financial services group reports a £1.5bn loss.
RBS’ interim results for the six months to June 30 show a loss before tax of £1.5bn, rising from the £794m loss reported one year ago.
Several retail fund managers own the bank, including Jupiter’s Ian McVeigh and Skandia’s Lee Freeman-Shor.
The loss was incurred after the group faced a tough six months, setting aside extra funds to compensate customers mis-sold financial products and those locked out their bank accounts in June by an IT glitch.
The Share Centre investment research manager Sheridan Admans says: “Customer trust is being tested to the fullest and whilst problems persist in the banking sector and European debt markets we suggest investors avoid RBS.
“We believe there are better opportunities in the market and as confirmed by its chairman in May, RBS’s share price is not going to climb to previous highs for some time to come.”
Admans also points out that the payouts for problems such as payment protection insurance mis-selling and the IT meltdown were expected. However, he notes that the bank is also prepared itself for any fallout from the Libor-rigging scandal – which it says “is on our agenda”.
RBS is found in the top 10 holdings of McVeigh’s £676m Jupiter UK Growth fund, where it makes up 3.96 per cent of the portfolio*. It is also major holding of John White’s £275.7m GLG UK Select fund*, Freeman-Shor’s £147.2m Skandia UK Best Ideas fund** and David Cumming’s £24.8m Standard Life Investments UK Equity Recovery fund*.
* as of 30 June
** as of 30 April
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