RBS 2011 Annual Report Download - page 288

286 RBS Group 2011
RBS Group 2011 286
Total Shareholder Return performance
The first graph below shows the performance of the company over the past five years in terms of TSR compared with that of the companies comprising
the FTSE 100 Index. This index has been selected because it represents a cross-section of leading UK companies. The TSR for FTSE banks for the
same period has been added for comparison.
The TSR for the company and the indices have been rebased to 100 for 2006. The second graph shows the same performance of the company during
2011.
Total shareholder return - one year
Financial shares outperformed the market for most of the first half of the year. However, focus shifted to the fiscal positions of peripheral Eurozone
economies, particularly Greece and Italy, in the summer. This prompted investor concerns about the implications for banks exposed to these
countries and caused stresses in European bank funding markets. The RBS share price was impacted broadly in line with other domestic UK banks and
European peers, underperforming the market in the second half. Accompanying this was a reduction in the consensus outlook for bank earnings, driven
by a weaker outlook for growth in the global economy.
In addition, the weight of new regulation on European banks raised concerns about banks' ability to generate attractive returns. Specifically in the
UK, the publication of the ICB report in September recommending the ring-fencing of retail banking operations was perceived as detrimental for RBS
and its UK domestic peers, although details of the regulations are yet to be finalised.
Implementation of the Group’s recovery plan started in January 2009
with the publication of the preliminary 2008 losses. The share price
reached a low point of just under 10p per share on the news.
Since that date to 22 February 2012, the day before the Group’s
2011 results announcement, the Group’s share price has risen 265%
which compares to 164% and 145% respectively for the FTSE banks
index and the FTSE 100 index as a whole.
Directors’ remuneration report continued
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