Numis previews RBS results and new strategy

21st Feb 2014 10:00

Numis Securities has reiterated its 'add' rating and 374p target price for banking group RBS ahead of its 2013 results next week.RBS was making headlines on Friday after the Financial Times previewed its upcoming strategy update, saying that the bank is planning a "dramatic retrenchment". The paper suggests that RBS will restructure to focus on three customer groups: retail, small businesses and larger corporates. The current Investment Banking division is expected to be folded into the corporate business and will see heavy headcount cuts of around 11,000."It has in our view been clear for some time that the government has wanted RBS to retrench to a UK focused Retail and Commercial Bank. Arguably, one of the reasons for Stephen Hester's departure from RBS was over the future of the Investment Banking business," said Numis Analyst Mike Trippitt.Trippitt said he sees the new strategy as a "positive development", subject to the scale of restructuring charges and impact on the bank's capital position.The results, which are due out February 27th, are expected to see the bank report a statutory loss of £7.2bn, which includes the £4.5bn upfront provision for the new 'Internal Bad Bank', Numis estimates.The stock was up 1.8% at 362.1p by 10:49 on Friday.BC