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.