LONDON (ShareCast) - Royal Bank of Scotland (LSE: RBS.L - news) got a boost from broker Cazenove, which has turned positive on the bank.
Subscribing to the "less is more" dictum, Cazenove says the appeal of Royal Bank of Scotland (RBS) is that it intends to reduce in size, and it has plenty of assets outside its UK heartland that it can, and will, offload. Cazenove has shifted its rating of the shares, moving from "underperform" to "outperform".
"On a balance sheet one-third smaller, we estimate potential earnings [per share] of 6.5p without assuming a full recovery in net interest margins," Cazenove said. The broker believes that the share price could return to 60p, a level not seen since December of last year, although with the outlook for UK banking uncertain the broker declined to put a time scale on its price target.
Asia-focused bank Standard Chartered (LSE: STAN.L - news) has eased back, despite enjoying record income and operating profit in the first five months of this year. Some of this success has been offset by weakness in consumer banking, however, where income remains under pressure due to "liability margin compression and the impact of muted wealth management sales".
FTSE 100 - Risers
Royal Bank of Scotland Group (RBS) 36.74p +3.32%
Schroders NV (SDRC) 683.50p +2.63%
G4S (GFS) 205.50p +2.37%
Tullow Oil (LSE: TLW.L - news) (TLW) 930.00p +2.20%
3i Group (III) 238.50p +1.92%
Schroders (LSE: SDR.L - news) (SDR) 830.50p +1.78%
Wolseley (LSE: WOS.L - news) (WOS) 1,063.00p +1.72%
Standard Life (LSE: SL.L - news) (SL.) 181.70p +1.62%
FTSE 100 - Fallers
Prudential (PRU) 403.00p -3.30%
Standard Chartered (STAN) 1,164.00p -2.59%
Smiths Group (LSE: SMIN.L - news) (SMIN) 688.50p -2.34%
Rio Tinto (LSE: RIO.L - news) (RIO) 2,085.50p -2.14%
Carnival (CCL) 1,599.00p -2.02%
Smith & Nephew (SN.) 438.50p -1.85%
Friends Provident Group (FP.) 65.73p -1.75%
Aviva (AV.) 328.25p -1.72%
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