Buy at 35p (this week's price 38p), advises Cazenove. With £40bn of new equity and many of the banks loans now under a £300m government insurance scheme, Cazenove believes that the issue of capital adequacy has now been addressed.
Although the broker forecasts losses for both 2009 and 2010, it believes that the share price should now react positively to further news of restructuring and disposals. Overall, new management are setting RBS on the right path in becoming a smaller group, notes Cazenove.
In conclusion, although the level of economic activity remains key, RBS should outperform rivals and the rating has been upgraded to buy (previously sell).
| Current price 1:22PM | 43.47 |  0.55 |
