What You Were Selling Last Week: Royal Bank of Scotland Group plc (ADR) (RBS)

A healthy bank should trade at a premium to its net asset value (NAV) — HSBC is currently the only one of the Big Four to do so. Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) is currently trading at a whopping 70% discount to its NAV — far, far greater than rivals Lloyds and Barclays. Whilst, in theory that could mean Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) is the bargain of the century, it could also mean the market sees a great deal of risk ahead for the bank.

And with so much uncertainty surrounding Royal Bank of Scotland Group plc (ADR) (NYSE:RBS)– Will it be split up into separate retail and investment banking companies? What will happen to the government’s holding, and when? Will any more mis-selling scandals emerge? Will its restructuring programme, originally supposed to be completed this year, actually be finished in 2014? When will dividends recommence? Who will replace Stephen Hester? — the market may well be right.

The article What You Were Selling Last Week: Royal Bank of Scotland originally appeared on Fool.com and is written by Jon Wallis.

Jon doesn’t own shares in Royal Bank of Scotland Group or any other company mentioned in this article. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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