RBS Experiencing Rising Shares after Announcing New Sale Plan
Published By : 12 Jun 2015 | Published By : QYRESEARCH
The Royal Bank of Scotland (RBS) has witnessed rising shares on Thursday after the announcement of George Osborne, Britain’s Finance Minister that government will start selling it shares in the bank.
During the annual speech for financiers in the London city during Wednesday, the minister stated that the government will start selling off its stake of 80 per cent in the bank which was worth US$49 billion pounds, prior to talking independent advice from the Bank of England and the investment bank Rothschild. The shares in the Royal Bank of Scotland showed an increase by 1.1 per cent.
According to market analysts, there would be a substantial interest from institutional investors showed willingness to overlook the ongoing issues associated to the past misconduct at RBS and the uncertainties shows over Britain’s continued membership of the EU (European Union).
Some of such institutions are based in the United States, and look at bank as a play for Britain’s economic recovery. These banks are also attracted by the Royal Bank of Scotland’s market value which is at present just 0.8 per cent times that of its assets. Furthermore, when compared with the state backed Lloyds Banking Group, where government has already sold most of their half stake, the trades were around 1.3 times the total value of the their assets.
According to a market analyst, he would say that the demand will be high from large institutions based in the United Kingdom, in the United States, and in the Europe. As this is a very attractive reward/risk payoff that has the potential excess capital which is down the road.