Fixed income: RBS creates its own kind of FIG business

On November 3 RBS announced a 20% quarterly decline in third-quarter investment banking revenues. Subsequently last month, with rising risk-weighted assets and amid worries about exposure to Ireland, the bank’s share price fell by nearly 15%. Fiona Swaffield, analyst at Execution Noble, warned investors: “Over the next 12 months, we find it difficult for RBS to trade above its tangible book value of 51.8p/share, as the bank is likely not to earn rates of return in excess of its cost of capital for another two years.”