The Motley Fool

Politics Doesn’t Put Me Off Royal Bank Of Scotland Group plc

It always fascinates me how politicians seem to jump on bandwagons.

Indeed, the Parliamentary Commission on Banking Standards recently commented that it is “important for all the options for RBS‘s (LSE: RBS) (NYSE: RBS.US) future structure to be examined as a matter of urgency”.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

This seems to indicate that the Commission is seeking a break-up of RBS between a ‘good’ RBS and a ‘bad’ RBS so as to create two different entities. This idea is backed by a whole host of MPs, former Bank of England Governor, Lord King, and former Chancellor, Lord Lawson. Indeed, it seems to be a bandwagon worth jumping on, so it would be of little surprise to see other MPs follow suit and tie their respective flags to this particular mast.

Of course, the debate surrounding whether RBS should be split up or not is, for me, something of a red herring. This is because RBS is already well into the process of splitting itself into a ‘good’ and a ‘bad’ bank; however, it is just not labelling itself as such.

The two areas are, according to RBS, core and non-core, with the core part of the bank representing the bits it wants to keep as part of what it hopes will be a thriving RBS. The non-core assets, meanwhile, are those that it either wants to sell because they require too much capital for too little return, or else it is being forced to sell them (as in the case of the sale of English branches).

So, the debate in Westminster Village is, in my view, rather disingenuous to Stephen Hester, RBS’s current CEO, because he has worked hard to create a ‘good’ bank and dispose of the bits that arguably made RBS a ‘bad’ bank.

This strategy is starting to show signs of real progress, with RBS forecast to record earnings per share of around 30p in 2014. This puts shares on a forward price-to-earnings (P/E) ratio of just 10, which compares very favourably to the FTSE 100 on 14.8 and to the wider banking sector on 16.1.

Furthermore, although only a small proportion of such earnings are forecast to be paid out as dividends and I believe this is a prudent position for the bank to adopt. Using the capital to further shore up the balance sheet seems to be more sensible than returning cash to shareholders, at least until RBS becomes a ‘really good’ bank.

Of course, you may be looking for yield opportunities today. If you are, I recommend you view this exclusive report entitles The Motley Fool’s Top Income Share.

It is completely free and without obligation to view the report and may just provide your portfolio with the dividend boost it needs when inflation remains a concern and bank saving rates are relatively low.

Click here to take a look.

> Peter owns shares in RBS.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.