Broker snap: Nomura stays cautious on RBS

4th Nov 2011 10:26

With "no negative surprises" in Royal Bank of Scotland's (RBS) third quarter results, Nomura highlights that figures were in line with expectations, but says that "longer-term challenges remain".Group income of £6.36bn was slightly ahead of the broker's £6.25bn forecast, while operating expenses of £3.82bn were slightly higher than the £3.6bn estimate."Against the currently volatile operating environment this may prompt some positive relief and has potential read across to Lloyds, which reports on Tuesday," the broker said.However, Nomura highlights that RBS's outlook for longer-term profitability has now deteriorated due to the Independent Commission on Banking recommendations and a macroeconomic uncertainties.The broker keeps its neutral rating and 34p target.RBS was one of the best performing stocks on the FTSE 100 on Friday, rising 4.7*% to 23.89p by 10:25.BC