View from City Road: RBS builds on local strengths
Friday 04 December 1992
So it is not surprising that the bank has dropped piecemeal expansion across England, and is to concentrate on building outwards from the North-west, where the old William Deacon's network still has a market share of nearly a fifth. Long-established customers have been the least risky ones in this recession.
Royal's retrenchment strategy, including the still-awaited sale of most of the merchant bank Charterhouse to a Franco-German consortium, is hardly an exciting one. But this new emphasis on regional strengths is excellent for customers, and possibly good for shareholders, if it is properly exploited. The advantages of economies of scale in banking are exaggerated.
The downside is that when the recovery is under way, Royal may be back to the problem it started with: slow economic growth in its core areas.
In the short term, the good news for shareholders is that cost-cutting is happening at last, later than at most banks, but bringing plenty of scope for higher earnings. The dividend has been maintained, but is uncovered, while bad debts will stay high for a year, so it will be 1994 before there is much prospect of dividend growth.
Until recently, bid prospects have been one of the few reasons to hold Royal shares, but speculation is now better directed at TSB and Standard Chartered. At 189p, up 8.5p, Royal may at last be worth holding for itself.
- 1 If you're not already angry about the migrant crisis, here's a history lesson to remind you why you really should be
- 2 David De Gea: Manchester United goalkeeper's £29m move to Real Madrid off - because paperwork 'not done in time'
- 3 Pansexual: What is it - and when did the term gain popularity?
- 4 A Chinese journalist has appeared on state television 'confessing' to causing the stock market chaos
- 5 Blood Moon and Supermoon: September to bring brightest – and dimmest – full Moon of the year on same night
Miley Cyrus calls out hypocrisy of women’s nipples being taboo
The man who sold Minecraft to Microsoft for £2.5 billion says it's made him miserable
Nazi 'gold train': Fire engulfs suspected location of vehicle in Poland
Blood Moon and Supermoon: September to bring brightest – and dimmest – full Moon of the year on same night
Isis releases graphic video showing four Shia 'spies' being burned alive in Anbar, Iraq
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
UN investigating British Government over human rights abuses caused by IDS welfare reforms
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...