Broker snap: AlphaValue downgrades RBS to add

16th Nov 2011 10:26

AlphaValue downgraded its rating on part-nationalised lender Royal Bank of Scotland on Tuesday from buy to add.The broker said that while third quarter net attributable profit came in at £1,226m -helped by a £2,357m pre-tax gain on own debt and a £791m tax credit - the underlying pre-tax profit figure was just £267m, around one-third of that in the second quarter.Additionally, "all revenue lines were below expectations, while costs were in line and impairment charges slightly above," the broker said.As such, AlphaValue has cut its underlying earnings projections for 2011 and the next couple of years.The target price is slashed from 29.8p to 24.6p.BC