Broker snap: US sell-off a possibility for RBS

25th Sep 2009 11:03

The share price of part-nationalised bank Royal Bank of Scotland (RBS) has recovered from just above 35p in mid-July to more than 50p, a rally that continues to perplex Goldman Sachs.The US investment bank expects RBS to remain loss-making in the short term, while the threat of another cash call continues to hang over the bank's shares.Goldman Sachs suggests that as an alternative to a rights issue RBS could sell off some or part of its US operations in order to reduce debt, given that no one seems very interested in buying the group's insurance operations at RBS's asking price; the insurance units, including Direct Line and Churchill, have been on the selling block since April of this year.