Have Royal Bank shares been oversold?
A report from Exane BNP Paribas today sheds a whole new light on Royal Bank of Scotland with the broker expressing an opinion that the shares have been oversold after being ignored by many during 2009. The broker believes that things can only get better for Royal Bank of Scotland in 2010 and while a planned disposal in Pakistan has collapsed due to regulatory issues it appears that investors are now willing to give the company another chance.
The positive research note is based upon the fact that the UK economy is on the verge of turning, there are more asset disposals planned for the future and indeed there is still a relatively strong underlying business within Royal Bank of Scotland. It is easy to forget that Royal Bank of Scotland was seen by many as the largest financial operation in the world at the height of the banking boom but has now fallen away to relative obscurity.
It is possible we will see investors regain their trust in Royal Bank of Scotland as and when the company delivers profits growth and a detailed plan for the future. However, until we see confirmation that this difficult period in the company's history is now over it is likely that investors will err on the side of caution and wait for positive news in the future.
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