Royal Bank Of Scotland Group reports 56.4% Net Income growth in 2018 and 4.4% Revenue growth
15 Feb 2019 • About Royal Bank Of Scotland Group (
$RBS) • By InTwits
Royal Bank Of Scotland Group reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Royal Bank Of Scotland Group has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.1%. At the same time it's a lot of higher than industry average of 2.4%.
- CAPEX is quite volatile: 875 EGPm in 2018, 745 EGPm in 2017, 561 EGPm in 2016, 304 EGPm in 2015, 243 EGPm in 2014
- The company has potentially unprofitable business model: ROIC is 1.8%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.0x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Royal Bank Of Scotland Group's Revenue increased on 4.4%. Revenue decline was slowing down on average by 5.2 pp per annum in the last 5 years.
Net Income margin increased on 4.3 pp from 8.7% to 13.0% in 2018. The efficient tax rate was 35.9% in 2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 3.7% in 2018. The company's CAPEX/Revenue decreased slightly on 0.91 pp from 4.6% in 2015 to 3.7% in 2018. Average CAPEX/Revenue for the last three years was 5.5%. During the last 5 years CAPEX as a % of Revenue topped in 2017 at 7.1%.
Return on investment
The company operates at low ROIC (1.8%) and ROE (3.9%). ROIC increased slightly on 0.76 pp from 1.1% to 1.8% in 2018. ROE increased on 2.4 pp from 1.6% to 3.9% in 2018. During the last 5 years ROIC bottomed in 2016 at -2.0% and was growing since that time.
Leverage (Debt)
Debt decreased on 4.3% while cash decreased on 9.6%.
Royal Bank Of Scotland Group has no short term refinancing risk: cash is higher than short term debt (138.6%).
Management team
CEO total compensation was £3,578,000 in 2018 which included £1,000,000 salary. Royal Bank Of Scotland Group's CFO Katie Murray has spent 1 year with the company.
0.015% of the company is owned by insiders.
The company has 67,600 employees. Average revenue per employee in 2018 was £245,592.
Financial and operational results
FY ended 31 Dec 2018
Royal Bank Of Scotland Group ($RBS) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 19,720 | 16,876 | 16,161 | 15,909 | 16,602 | 4.4% |
| Tax | | | | | 1,208 | |
| Net Income | -2,771 | -1,594 | -5,258 | 1,380 | 2,159 | 56.4% |
Balance Sheet
|
|---|
| Cash | 74,872 | 79,404 | 74,250 | 98,337 | 88,897 | -9.6% |
| Short Term Debt | 33,976 | 48,839 | 55,394 | 39,479 | 64,156 | 62.5% |
| Long Term Debt | 73,185 | 50,997 | 46,664 | 74,652 | 45,092 | -39.6% |
Cash flow
|
|---|
| Capex | 816 | 783 | 912 | 1,132 | 619 | -45.3% |
Ratios
|
|---|
| Revenue growth | -15.2% | -14.4% | -4.2% | -1.6% | 4.4% | |
|
|---|
| Net Income Margin | -14.1% | -9.4% | -32.5% | 8.7% | 13.0% | 4.3% |
| CAPEX, % of revenue | 4.1% | 4.6% | 5.6% | 7.1% | 3.7% | -3.4% |
|
|---|
| ROIC | 0.9% | -1.2% | -2.0% | 1.1% | 1.8% | 0.8% |
| ROE | -6.1% | -3.6% | -13.6% | 1.6% | 3.9% | 2.4% |
People
|
|---|
| Insider ownership | | | | | 0.0% | |
| Employees | | | | | 67,600 | |
| Revenue/Employee, th. £ | | | | | 246 | |
Peers in Banks
Below we provide Royal Bank Of Scotland Group benchmarking against other companies in Banks industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| European Islamic Investment Bank ($EIIB) | 42.3% | -4.1% | -63.9% | 232.5% | |
| Halyk Savings Bank Of Kazakhstn JSC ($HSBK) | 16.3% | 19.5% | 16.4% | 59.5% | |
| Zenith Bank ($ZENB) | | 6.8% | 17.9% | 46.7% | |
| Commercial Intl Bank(Egypt)S.A.E ($CBKD) | | 26.8% | 27.0% | 46.4% | 28.9% |
| TCS Group Holding ($TCS) | 11.5% | 10.6% | 34.0% | 33.7% | |
| |
|---|
| Median (43 companies) | 11.5% | 4.0% | 3.9% | 4.5% | 13.9% |
|---|
| Royal Bank Of Scotland Group ($RBS) | | -14.4% | -4.2% | -1.6% | 4.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Lloyds Banking Group ($LLPC) | 13.1% | 13.6% | 14.5% | 14.5% | |
| Banco Santander Sa ($BNC) | 8.9% | 10.2% | 9.1% | 10.0% | 14.7% |
| Bcb Hldgs Ltd ($BCBW) | 5.4% | 2.5% | 3.0% | 7.3% | 5.9% |
| Diamond Bank ($DBPA) | 6.0% | 6.7% | 6.2% | 7.0% | |
| Commerzbank Ag ($CZB) | 4.6% | 1.6% | 2.5% | 6.3% | |
| |
|---|
| Median (39 companies) | 2.0% | 2.5% | 2.0% | 1.8% | 1.2% |
|---|
| Royal Bank Of Scotland Group ($RBS) | 4.1% | 4.6% | 5.6% | 7.1% | 3.7% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| TCS Group Holding ($TCS) | 6.7% | 3.4% | 22.5% | 31.8% | |
| Commercial Intl Bank(Egypt)S.A.E ($CBKD) | 30.1% | 30.3% | 28.0% | 25.3% | 25.4% |
| Guaranty Trust Bank ($GRTB) | 17.8% | 16.0% | 17.4% | 18.3% | |
| Sberbank Of Russia ($SBER) | 4.8% | 4.0% | 9.4% | 13.0% | |
| Zenith Bank ($ZENB) | 15.0% | 11.2% | 11.1% | 11.4% | |
| |
|---|
| Median (43 companies) | 4.4% | 3.5% | 4.6% | 4.6% | 4.5% |
|---|
| Royal Bank Of Scotland Group ($RBS) | 0.9% | -1.2% | -2.0% | 1.1% | 1.8% |
