Paul Harris, CFA Royal Bank of Scotland PLC RBS-N DON'T BUY Sep 23, 2010

Got hit during the global financial crisis. Ultimately the British government took a big stake in this. The UK actually went into a hole about a year after, so the UK recovery process is quite a bit behind the US. An increase in interest rates will actually increase employment for the UK. Thinks British banks in general are a little ahead of themselves. A reinstatement of a dividend would really cause these companies to move higher. A sector to watch, but valuations are a little rich right now.

It is a little troubled. It is a very high risk trade.

Probably his least favourite company. New CEO is trying to make it a smaller bank and focus the business and has a significant task in order to succeed. Impressed enough that he would take a 2^nd look at this bank. It still has a very strong franchise and is potentially a good bank. When looking at the opportunities in the UK, he would rather play it through Hundles (?) Bank because they are growing by 40%.

Banking system took a terrible shellacking 5 years ago and is still recovering today. It’s not over yet. This one took it on the chin because it was one of the aggressive banks going into the meltdown. If you are patient enough, a rising tide lifts all boats, but when there is a lot of damage is sometimes takes them longer. You have to ask yourself is it more of an opportunity lost not to redeploy the capital and wait than it is to get into something that has a four-wheel-drive going right now. (See Top Picks.)

(Market Call Minute.) In 2 day’s time, you will know if it has to relocate to London. The big thing is 1) the UK government is going to be selling shares and 2) will be selling its Citizens financial US bank. After the referendum this will be a Buy, if you are comfortable with UK government selling its shares later.