With an 8% yield these shares MUST be cheap. Does anyone out there really expect RBS to sut their div? Have put my shirt on it at 401.

lets hope not.

A dividend cut would be unlikely I think (hope), but so will any increases for a few years.
The reason the market is scared is the fear of a rights issue to support the balance sheet.
I'm a holder of RBS as it is a very well run company, has a solid international base, good prospects, oh and a good dividend yield.
I think on a 3-5 year view buyers at this price will be laughing all the way to the bank. If you're looking to jump in and out in the next few months you might be disappointed - their 2008 share price trend will be set on the day they release their results and update the market in March

I agree, there won't be a dividend cut here. There won't be a financial need IMO and the SP will rise again, reducing the yield as a result.

is this worth buying yet?

No...IMHO.

Yes if you take 2/5 year view.

thay are worth buying at a lower price, the best way to buy would be to split purchases over the next 12 month's in three or 4 equal amount's. this way you won't be to exposed, you pay a little more in dealing costs, but look on it as insurance.

Reckon your right, Spitfire, on today's news. The AFX says that Sir Tom McKillop, non-exec Chairman, has briefed their 20 major institutional investors (not quite in that league). They have no need or intention to cut the dividend or announce capital-raising when it unveils full year figures later this month. Their contingency plan, in the event of "systemic shock" (nice one!), is to dispose of assets, e.f. a Bank of China stake worth appraching 3 billion.

Thought I would run a short-term position given the publicity this will get in tomorrow's papers. Mind, not used to the violently active trading you get with a share of this size.

Eric

Can't argue with the logic, Eric - but if there was a "systemic shock" (caused perhaps in no small part by overvalued assets on bank balance sheets) then disposals might not prove straightforward. Not a holder of RBS, but still have enough BARC to keep a wary eye on the sector.

Partridge: attaracted to the share by the yield (and earnings). Happy to take Chair at face value when he says that yield is not at risk; nor is there any intention to dilute holdings through a rights issue. So a secure yield of 8% is very attractive. OK, a shock which undermined the whole of the banking sector would undermine the whole of the market: if you take that view one would be better out of shares altogether and put the cash under the mattress!

Eric

Yes, but the RBS finance issue will be with us for some time, perhaps even after the NRK fiasco is forgotten (if ever!).
Any "Rights Issue" mentioned here recently, will reduce your yield % as well as cost you . . . it is this that is making nervous investors quit. Big players are "locked-in" since to pull out would make their position even worse, getting a low-price for any large volumes.

I believe RBS and A&L are being "pointed-at" as being more involved in Mortages here in the UK - with a proportion of these becomming defaulters, that knocks the perception of the Bank, even tho' it's standard practice to foreclose.

By many accounts NRK Mortgages are quite sound - so the Bank is unlikely to default - despite the queues etc. Their real problem was that the Execs didn't understand (or cared to ignore), the Risk they were close to.

My goodness, just looked at the chart.

Who would have thought that RBS would lose half of it's 'value' in under 12 months.

With a 10 bill rights issue coming soon what do you expect..

I'll just have to go and buy some more then. :)

what date do they go ex/div ?

I believe it is 5th March

with price now at 362, if my calulations are right the p/bv would be 0.78 now. In the financial recession in 1990 US banks had a p.bv value on average of 0.9, at the lowest point. I know it could be effected by rights issues or more writedowns etc, but if the price goes further south in another sell off, I will be very tempted to buy.

Is there bad news to come..?

No only good results, but will the market respond positively when only bad news matters?

I doubt it halifax.

I am not as pessimistic as some, the truth will out soon when the market realises that the shorters (hedge funds) are going to be caught out. With interest rates falling the "little boy" will soon tell investors that these hedge funds have no clothes.
Take on the banks at your peril everybody needs them even governments. Who needs hedge funds?

I am really looking forward to either RAB and asssociates or Dicky Pickles trying to repay us taxpayers 20 billion when NRK are losing money at the moment never mind the bad debts which are going to explode as a result of the massive expansion of their lending book during the past year.

BARC LLOY RBS etc are as they say "laughing all the way to the BANK" at the governments expense.

with news today of soc gen rights issue of 1 to 4 sharea at 39% discount to price, and negative comments in the media, I expect banks to be hit this week, which should produce some good entry prices. As well as RBS, I will look into BARC.

I agree BB. due to open bank results season on Wednesday which may set a negative tone before BARC report on 19th.

see latest HSBC review of UK banking sector below, having said in last thread I would look into BARC, I changed my mind and put LLOY on my list with RBS, before I saw the review below.....................

HSBC has cut its price targets on UK banks in a sector review following uncertainty in the housing and commercial property market, the possibility of a domestic recession and potential collateralized debt obligation write offs, market sources said.

In a note out this morning, HSBC reiterated its 'underweight' stance on both Barclays and HBOS and cut its target prices on the pair. HSBC's target price in Barclays is now 410 pence from 440, HBOS' is 630 pence from 730.

Meanwhile, the broker retained its 'neutral' stance on Alliance & Leicester, Bradford & Bingley and Standard Chartered. Its target price are: Alliance 620 pence, from 770; Bradford 250 pence, from 290; and Standard 1,700 pence from 1,840.

HSBC also reiterated its 'overweight' stance on Lloyds TSB and Royal Bank of Scotland, respectively cutting the price targets to 470 pence, from 550, and to 440 pence, from 540.

My stance on HSBC is sell target 675p.IMHO too many problems in the US. BARC may surprise, LLOY is the "steady as you go" bank and RBS after the ABN mistake is anyones guess.

BB. increasing their dividend bodes well for the other UK banks reporting shortly. My favourite for the least likely to be affected by the sub prime fiasco is LLOYDS again with an increase in dividend possile yields looking juicy.

Lloyds are down to 411 this morning, I have a 390 entrance price for them which in these volatile markets is fairly realistic. Results are due 25th Feb, so I still have time to buy, and take advantage of a very nice dividend.

Banks very weak this morning, they seem to be effected by negative sentiment to BB. and poor figures from UBS with another $12bn writedown, I also saw on Bloomberg thet the German central bank are actively rescuing one of there banks, can't remember the name of bank.

So hopefully moving towards my buy price for lloy and rbs.

We are at the pivotal point today it could go either way back to 400p or down to 300p.

Spitfire LLOY results out on 22nd Feb not 25th as stated in your thread 30. Presumably chose a friday so directors may have a good lunch on POETS day!
XD on 5th March does one wait for the results before buying is the question?
RBS results out on 28th February by then the market will have probably made up its mind about the recession scare and whether the banks can maintain these mouthwatering yields.
Barclays results on tuesday will set the tone next week.

Halifax thanks for the dates, would like to buy some rbs and lloy before the results, and top up after if all tooks good. Looks like the markets may have finished there rally now, and hopeful of an entrance price tomorrow.

pleased to buy some lloy today, rbs didn't quite make my price, maybe next week. lloy seemed weaker than other banks today, not sure why. See article released today.

UK bank Lloyds TSB is expected to report a 4.7 pct increase in annual profit next Friday, helped by steady growth in its core retail arm and a relative lack of direct exposure to the credit squeeze.

Lloyds, the UK's fifth-biggest bank, is expected to report an underlying pretax profit of 3.89 bln stg for the year to Dec 31 2007, up from 3.71 bln stg the previous year, according to a consensus analyst forecast collected by the company.

Although Lloyds is less exposed to the credit crunch than some rivals due to its lack of a strong presence in investment banking, investors will be watching for any further write-down in debt-related assets on top of the 200 mln stg it announced in December.

The market is likely to scrutinise any comments from the bank on its fast-growing commercial property division, amid signs of a gathering slowdown in the UK commercial property market.

Investors will also be looking for Lloyds to deliver on guidance issued in December that its retail bad debts would be no higher than in 2006.

It's amazing how market sentiment changes so quickly, Friday all doom and gloom with Financials leading market down, today Financials are all positive leading market up. The reason is an article in The Times saying barc, lloy will raise the dividends this week, this had already been widely anticipated since November.

I believe Banks will have to come clean this time, and I think they will, tomorrow will be very interesting for barc, I believe another 1.5bn w/o is anticipated (correct me is I'm wrong)

Remember 9th Nov when barc was temporary suspended because of wild speculation of 10bn w/o, which in the event turned out to be only 1.3bn. For what it's worth I believe US banks have talked upped the size of UK banks sub prime exposure, and would hope to see this confirmed tomorrow.

good results from lloy with profits just slightly ahead of consensus, and only 280m write offs for whole of 2007. Even a rise in the dividend payment of 5%.

As dull as ditch water, but this is exactly what we need in these markets.

Within the sector I'd suggest that LLOY is the safest place for your money right now. They've barely been touched by the credit crisis (relatively speaking) and the dividend is superb.

LLOY is certainly safest place in sector, I was going to invest 50/50 between lloy and rbs, but have changed mind to 70/30 in favour of lloy. shame a didn't buy more than I did on Friday, but will keep buying on dips.