Scope Ratings has updated its rating report for The Royal Bank of Scotland PLC, rated A- with Stable Outlook. Information on the group’s positioning with respect to estimated MREL requirements has been added.
The rating of A- is based on the credit fundamentals of the entire group, The Royal Bank of Scotland Group Plc. The rating reflects the group’s strong UK retail and corporate franchise which has demonstrated encouraging resilience throughout the restructuring process. The group’s risk profile in regards to asset quality, liquidity and solvency have also improved to reassuring levels. The evolving business model, however, has yet to translate into reliable and sustainable earnings, with legacy issues and restructuring costs continuing to overshadow the performance of the core bank. As well, potential conduct costs related to US mortgage-backed securities and resolving state aid obligations remain important issues for the group’s financial soundness.
Majority ownership by the UK government is currently a supporting factor for the A- rating, accounting for a single notch of uplift. As the UK government reduces its majority ownership significantly, this rating uplift is likely to be removed. At that time, the rating agency would expect the group’s own credit profile to have materially improved.
Download updated rating report on RBS
© 2017 Scope SE & Co. KGaA and all its subsidiaries including Scope Ratings AG, Scope Analysis GmbH, Scope Investor Services GmbH (collectively, Scope). All rights reserved. The information and data supporting Scope’s ratings, rating reports, rating opinions and related research and credit opinions originate from sources Scope considers to be reliable and accurate. Scope cannot however independently verify the reliability and accuracy of the information and data. Scope’s ratings, rating reports, rating opinions, or related research and credit opinions are provided “as is” without any representation or warranty of any kind. In no circumstance shall Scope or its directors, officers, employees and other representatives be liable to any party for any direct, indirect, incidental or otherwise damages, expenses of any kind, or losses arising from any use of Scope’s ratings, rating reports, rating opinions, related research or credit opinions. Ratings and other related credit opinions issued by Scope are, and have to be viewed by any party, as opinions on relative credit risk and not as a statement of fact or recommendation to purchase, hold or sell securities. Past performance does not necessarily predict future results. Any report issued by Scope is not a prospectus or similar document related to a debt security or issuing entity. Scope issues credit ratings and related research and opinions with the understanding and expectation that parties using them will assess independently the suitability of each security for investment or transaction purposes. Scope’s credit ratings address relative credit risk, they do not address other risks such as market, liquidity, legal, or volatility. The information and data included herein is protected by copyright and other laws. To reproduce, transmit, transfer, disseminate, translate, resell, or store for subsequent use for any such purpose the information and data contained herein, contact Scope Ratings AG at Lennéstraße 5 D-10785 Berlin.