Could independence affect Scottish stocks like RBS?

Could independence affect Scottish stocks like RBS?

Research  these Stocks on Kapitall’s Playground Now

research now

The prospect of independence doesn't seem to be very invigorating for Scottish stocks.

This Thursday Scotland will vote on its independence. If the Scottish National Party (SNP), the party currently in power, is victorious then Scotland's more than 300 year-old union with England will come to an end.

Over the past two months opinion polls altered drastically. At the end of June, YouGov, the internet-based market research firm, suggested the pro-Union camp had a 19% lead over the the seperatist faction (SNP) with 12% undecided.

Last week similar polls showed the "Yes" (independence) camp trailing by just 4% with 5% undecided. With just two days to go, the race is too close to call, with a latest "poll of polls" putting "No" at 51% and "Yes" at 49%

Scotland has a rich history when it comes to banking. Many credit a Scot, David Hume, with creating the first economic model in his 1742 essay "Of the Balance of Trade." 

However, Scotland's two biggest banks, the Royal Bank of Scotland (RBS) and Lloyds (LYG), are wary about the impact of seperation from England. Last Thursday they announced that they would move their headquarters from Edinburgh to London if Scotland voted for independence. 

In the event of a "Yes" vote, an RBS statement says "material uncertainties" could arise from the referendum and impact RBS's credit ratings. For Scotland to form a new government would also mean the potential for new expenses and regulations for companies based there; in other words, banks are feeling a pressure to relocate to Britain as they devil they know, versus facing any further uncertainty. 

Many analysts believe RBS and Lloyds may decide to move their headquarters to London even if Scotland votes against independence, which by some estimates could cost the banks up to $1.6 billion each.

Following the announcements last week, shares in Lloyds rose up to 1.3% and RBS rose by more than 2% as markets openend and investors greeted the news.

How do you think the markets will react to Thursdays referendum? Use the information below to begin your analysis and let us know what you think in the comments.

Click on the interactive chart to view data over time. 

1. The Royal Bank of Scotland Group plc (RBS, Earnings, Analysts, Financials): The Royal Bank of Scotland Group plc, through its subsidiaries, offers banking and financial services to personal, commercial, corporate, and institutional customers in the United Kingdom, the United States, and internationally. Market cap at $64.92B, most recent closing price at $11.46. 



2. Lloyds Banking Group plc (LYG, Earnings, Analysts, Financials): Provides various banking and financial services to personal and corporate customers primarily in the United Kingdom. Market cap at $86.52B, most recent closing price at $4.91. 


(List compiled by Nico Willson. All data sourced from Zacks Investment Research.)


Analyze These Ideas: Getting Started

Dig Deeper: Access Company Snapshots, Charts, Filings


© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC – a FINRA/SIPC member.


2 responses to “Could independence affect Scottish stocks like RBS?”

  1. Business is too much compulsory for the new development. It will be performing with the suitable time through the same success. It will be performing with the good and valued forms in the different stages. Some business man can be much important factor regarding to the good waves.

Leave a Reply

Your email address will not be published. Required fields are marked *

  • See Most Recent Articles