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Shore Cap analysts unmoved by RBS's better than they expected underlying profit performance

Last updated: 13:44 24 May 2017 BST, First published: 15:44 24 May 2017 BST

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The analysts concluded that with 8% downside to their unchanged fair value estimate of 240p, there is no need to move their ‘hold’ rating on RBS shares

Analysts at Shore Capital have failed to be stirred by the recent better than expected underlying first quarter profit performance from Royal Bank of Scotland Group PLC (LON:RBS).

In a note to clients, they said: “While this is encouraging, the investment case continues to be overshadowed by a number of legacy issues (notably US RMBS claims and the proposed measure to support SME competition as an alternative to a sale of Williams & Glyn).”

The analysts added: “Management remains hopeful of resolving these issues during the current financial year and so enabling the group to return to statutory profitability in 2018 (for the first time in over a decade), but timing remains largely outside of its control.

They concluded that with 8% downside to their unchanged fair value estimate of 240p, there is no need to move their ‘hold’ rating on RBS shares.

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