Royal Bank of Scotland Group plc (ADR) (RBS): This Bank Is Still A Political Football

Additional risk

Investors in Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) should be aware that their investment carries the risk normally associated with a banking group but also the risk of government action to repay taxpayers in the way the government deems best. With many different unwinding proposals still up in the air, RBS is a more risky investment than a similar investment in HSBC or Lloyds. But investors with a greater tolerance for risk may find RBS to be a good banking industry play. The bank trades at less than half of tangible book value, a considerable discount to U.K. banking peers. If Royal Bank of Scotland Group plc (ADR) (NYSE:RBS)investors see and AIG type ending then RBS could prove to be one of the best remaining banking investments.

Alexander MacLennan has no position in any stocks mentioned. The Motley Fool recommends American International Group. The Motley Fool owns shares of American International Group and has the following options: Long Jan 2014 $25 Calls on American International Group.

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