Broker snap: Buried treasure at RBS, says Investec

18th Apr 2012 09:57

Investec is 'not wildly excited' ahead of Royal Bank of Scotland's first quarter update next month, but has maintained its buy recommendation on the stock recommending investors to look a little harder to find the 'buried treasure'.The broker expects the part-nationalised bank to report a small loss per share of 0.1p, notwithstanding seasonal benefits in Global Banking and Markets and positive one-offs from liability management and aircraft leasing.The broker expects a first-quarter Core pre-tax profit of £1.9bn and a Non-Core loss of £1.2bn as well as a net negative £0.7bn of one-off items. This equates to a "small" pre-tax loss of £26m, the research note shows."However, look a little harder, and you may find the best results for at least four quarters in GTS, Wealth, US R&C, Insurance as well as GBM," the broker said."'Core' Ulster will be dismal, and Non-Core losses remain substantial, but there is a (somewhat distant) recovery story fighting to get out!"The broker's 30p target is maintained.BC