Investec reiterates 'sell' on RBS

Gordon admitted that underlying profits before tax were in fact 18% ahead of the consensus number, but pointed out that if you took out extraordinary items then they in fact came in just below analysts' expectations.

More significant however were his estimates for fourth quarter losses, which would wipe out the earnings RBS had recorded year-to-date.

Those would also result in a tenth successive year of red ink and lower its tangible net asset value to roughly 285p, which was just above the shares' then current price.

Yet peers such as StanChart or Barclays were only changing hands at 0.8 and 0.6 times book value, he pointed out.

Not to be forgotten either, Gordon argued, the government still held a 71% stake in RBS.

Gordon reiterated his 'sell' recommendation while keeping his target price at 260p.

"We caution that investors should not forget the fact that Q4 of every year is usually used to “reckon up” RBS’ conduct costs (see Fig 1, page 3), which explains why the stock always tends to look rather more "expensive" in February!."