There are always plenty of numbers to evaluate when weighing up whether to buy a particular share.
Today I’m going to quickly review three figures for anyone thinking about investing in Royal Bank of Scotland (LSE: RBS) (NYSE: RBS.US).
That, according to RBS, is the average share price at which the government paid to save the bank during the financial crisis of 2008/9 (the 440.64p figure includes fees paid by RBS back to the government).
The taxpayer currently owns 81% of RBS and recent reports suggest the Treasury wants to return the bank to the private sector before the end of 2014. The 335p shares therefore need to advance 31% for the government to break even, and you can be sure the politicians would love to see the sale priced at a profit…
With City profit forecasts all over the place and no sign of a dividend, shareholders are left with the bank’s asset base to make a value case.
And that 445p is, in per share terms, the net tangible asset value of RBS’s latest balance sheet, which means the bank’s shares are currently valued at equivalent to 75% of the balance sheet.
A discount to assets does necessarily make the shares a ‘buy’, though. In particular, Barclays has a 336p per share asset value and traded at 309p just before admitting it required a £5.8bn rights issue to shore up its accounts.
That will be the basic pay of Ross McEwan, the incoming chief executive of RBS.
He’ll also receive a cash allowance in lieu of pension contributions at 35% of his salary. But at least he’s asked not to be considered for an annual bonus for this year or next.
Mr McEwan replaces Stephen Hester and could be a little cheaper than his predecessor, who collected a £1.2m salary and a £420,000 pension payment during 2012.
Mr Hester will also collect £1.6m in lieu of notice and share awards worth about £3m.
Whether Mr McEwan will prove to be better value than Mr Hester remains to be seen. For some perspective, the boss at Lloyds Banking is on a £1,061,000 basic salary.
So there you go, three numbers which may or may not have some bearing on whether you buy shares in RBS.
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> Maynard does not own any share mentioned in this article.
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