Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The Banks’ Real Results: Barclays PLC (ADR) (BCS), Royal Bank of Scotland Group plc (ADR) (RBS)

RBS is harassed by politicians with agendas, but that could yet turn to its advantage, with the Coalition eager for demonstrable progress before the next election in 2015. CEO Stephen Hester is making positive noises about privatization.

A partial flotation of the U.S. Citizen’s Bank could prove a valuation boost this year. Trading at 0.7 times TNAV, RBS has more headroom for rerating.

Barclays PLC (ADR) (NYSE:BCS)
Barclays’ results were accompanied by details of its new strategy, and greeted by a near-10% jump in the shares.

The bank will focus on the U.K., U.S., and Africa, and is cutting jobs in investment banking, Europe, and Asia. The sole closure is that of the toxic tax-structuring unit. It will invest in high-return businesses such as U.K. mortgages, its Wealth business, and Barclaycard — an often-overlooked gem.

It’s also committed to accelerate its dividend from next year, targeting a 30% payout. Trading at 0.8 times tangible NAV, Barclays may be undervalued.

Growth
There’s a reasonable growth story behind all the banks, and they have put most of their self-inflicted risks behind them: the wild speculations in derivatives and over-exuberant lending, and the rule-breaking that came back to bite.

But they’re more vulnerable than most companies to a blow-up in the eurozone, the risk that markets forget when they’re bullish and panic over when they’re bearish.

The article The Banks’ Real Results originally appeared on Fool.com and is written by Tony Reading.

Tony does not own any shares mentioned in this article.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.