Royal Bank Of Scotland Group reports 63.9% Net Income growth in 2019
14 Feb 2020 • About Royal Bank Of Scotland Group (
$RBS) • By InTwits
Royal Bank Of Scotland Group reported 2019 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Royal Bank Of Scotland Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.8%. At the same time it's a lot of higher than industry average of 1.9%.
- CAPEX is quite volatile: 1,303 EGPm in 2019, 875 EGPm in 2018, 745 EGPm in 2017, 561 EGPm in 2016, 304 EGPm in 2015
- The company has potentially unprofitable business model: ROIC is 2.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.9x 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 surged on 10.3%. Revenue decline was slowing down on average by 5.8 pp per annum in 2015-2019.
Net Income margin increased on 6.3 pp from 13.0% to 19.3% in 2019. During 2015-2019 Net Income margin bottomed in 2016 at -32.5% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In 2019 Royal Bank Of Scotland Group had CAPEX/Revenue of 3.1%. The company's CAPEX/Revenue decreased on 2.6 pp from 5.6% in 2016 to 3.1% in 2019. It's average level of CAPEX/Revenue for the last three years was 4.6%. During the last 5 years CAPEX as a % of Revenue topped in 2017 at 7.1% and was declining since that time.
Return on investment
The company operates at low ROIC (2.6%) and ROE (7.8%). ROIC increased slightly on 0.79 pp from 1.8% to 2.6% in 2019. ROE increased on 3.9 pp from 3.9% to 7.8% in 2019. ROIC followed a growing trend at 1.1 pp per annum in 2015-2019. During the last 5 years ROE bottomed in 2016 at -13.6% and was growing since that time.
Leverage (Debt)
Debt increased slightly on 0.97% while cash dropped on 12.4%.
Royal Bank Of Scotland Group has no short term refinancing risk: cash is higher than short term debt (127.4%).
Management team
Alison Rose is a Royal Bank Of Scotland Group's CEO. Alison Rose is a founder and has spent 0 years with the company. Royal Bank Of Scotland Group's CFO Katie Murray has spent 1 year with the company.
Financial and operational results
FY ended 31 Dec 2019
Royal Bank Of Scotland Group ($RBS) key annual financial indicators| mln. £ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 16,876 | 16,161 | 15,909 | 16,602 | 18,313 | 10.3% |
| Tax | | | | 1,208 | | |
| Net Income | -1,594 | -5,258 | 1,380 | 2,159 | 3,539 | 63.9% |
Balance Sheet
|
|---|
| Cash | 79,404 | 74,250 | 98,337 | 88,897 | 77,858 | -12.4% |
| Short Term Debt | 48,839 | 55,394 | 39,479 | 64,156 | 61,137 | -4.7% |
| Long Term Debt | 50,997 | 46,664 | 74,652 | 45,092 | 49,176 | 9.1% |
Cash flow
|
|---|
| Capex | 783 | 912 | 1,132 | 619 | 559 | -9.7% |
Ratios
|
|---|
| Revenue growth | -14.4% | -4.2% | -1.6% | 4.4% | 10.3% | |
|
|---|
| Net Income Margin | -9.4% | -32.5% | 8.7% | 13.0% | 19.3% | 6.3% |
| CAPEX, % of revenue | 4.6% | 5.6% | 7.1% | 3.7% | 3.1% | -0.7% |
|
|---|
| ROIC | -1.2% | -2.0% | 1.1% | 1.8% | 2.6% | 0.8% |
| ROE | -3.6% | -13.6% | 1.6% | 3.9% | 7.8% | 3.9% |
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 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Bank Muscat ($BKM) | | 6.9% | 8.2% | 5,513.3% | 19.2% |
| Finansbank ($FBKD) | | 16.8% | 19.0% | 50.1% | 13.9% |
| Commercial Intl Bank(Egypt)S.A.E ($CBKD) | | 27.0% | 46.4% | 28.9% | 11.6% |
| Turkiye Is Bankasi ($TIBD) | | 16.8% | 18.1% | 34.0% | 11.3% |
| Jpmorgan Chase & Co ($JPM) | | 4.4% | 8.0% | 15.4% | 8.4% |
| |
|---|
| Median (15 companies) | 4.2% | 3.9% | 4.5% | 12.9% | 7.0% |
|---|
| Royal Bank Of Scotland Group ($RBS) | | -4.2% | -1.6% | 4.4% | 10.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Banco Santander Sa ($BNC) | 10.2% | 9.1% | 10.0% | 14.7% | |
| Bcb Hldgs Ltd ($BCBW) | 2.5% | 3.0% | 7.3% | 5.9% | |
| Barclays ($BARC) | 7.1% | 6.3% | 5.4% | 4.9% | 6.0% |
| Turkiye Garanti Bankasi ($39IS) | 2.4% | 3.6% | 2.4% | 3.5% | 1.1% |
| Banco Bilbao Vizcaya Argentaria Sa ($BVA) | 6.0% | 3.3% | 1.9% | 2.5% | 2.1% |
| |
|---|
| Median (16 companies) | 2.5% | 2.0% | 1.8% | 1.3% | 1.4% |
|---|
| Royal Bank Of Scotland Group ($RBS) | 4.6% | 5.6% | 7.1% | 3.7% | 3.1% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Bcb Hldgs Ltd ($BCBW) | -8.7% | 5.7% | 5.0% | 34.6% | |
| Commercial Intl Bank(Egypt)S.A.E ($CBKD) | 30.3% | 28.0% | 25.3% | 25.4% | 24.1% |
| Komercni Banka ($KMCA) | 7.4% | 8.0% | 9.1% | 8.7% | 8.3% |
| Turkiye Garanti Bankasi ($39IS) | 4.3% | 5.5% | 6.5% | 6.5% | 6.3% |
| Finansbank ($FBKD) | 3.1% | 4.3% | 4.6% | 5.4% | 4.7% |
| |
|---|
| Median (34 companies) | 3.5% | 4.6% | 4.6% | 4.5% | 4.4% |
|---|
| Royal Bank Of Scotland Group ($RBS) | -1.2% | -2.0% | 1.1% | 1.8% | 2.6% |
