Broker snap: Earnings upgrades expected for RBS

26th Feb 2010 08:26

Initial response to Thursday's results from Royal Bank of Scotland (RBS) was generally positive, but the figures have not made a believer out of JP Morgan.The US investment house is advising its clients to remain underweight in the part-nationalised lender after loss before tax at £6.2bn came in a little better than JP Morgan's forecast of £6.3bn.Retail banking performance was in line while corporate banking came in better than expected, JP Morgan (JPM) reckons. The outcome at the Global Banking and Markets division was better than expected. 'Underlying revenues came in at £1.8bn vs. £2.1bn in Q3, a 14% decline which is significantly better than the industry average,' JPM notes. Fellow US bank Citigroup was a little easier to impress, and reckons the figures should 'drive consensus upgrades with a decent read-across for Lloyds on margins and CRE-related [commercial real estate-related] losses.'