Broker snap: Investec remains a 'seller' of RBS

14th Dec 2012 09:57

Investec has reiterated its 'sell' rating and 265p target price for banking group RBS on the back of the company's exposure to a tough market in Ireland.Figures from the Central Bank of Ireland showed yesterday that "things are, as we feared, still getting worse", said analyst Ian Gordon.Data shows that, in the third quarter, the number of mortgages (by value) that are now in over 90 days of arrears increased to 15.1%, from 14.1% in the second quarter and 13.3% in the first. Meanwhile, the proportion of those mortgages in less than 90 days of arrears also increased.Gordon said that this "doesn't even represent a slowing pace of deterioration".He highlighted that RBS has £19bn of Irish residential mortgages, 60% of which are already in negative equity."Perhaps we obsess on Ireland a bit too much? We recognise that it only accounts for 10.1% of RBS' balance sheet, but it has contributed 45% (or £9.3bn) of all group impairments over the past 11 quarters."Gordon concluded by saying: "It is disappointing that for all the many good things about the RBS turnaround story, the legacy of past mistakes will still be with us for several years to come."BC