UK government moves into profit on RBS stake

Royal Bank of Scotland Group PLC (RBS) is up 8% today to 50p as Bank of America Merrill Lynch said the 84%-government owned bank could turn to a profit this year as bad-debt charges and costs fall and margins increase. It thinks RBS shares could double in value over two years on an improved earnings outlook and raising its target price from 45p to 65p. Morgan Stanley also increased its target price on the bank to 50 pence from 40 pence on lower impairments, good asset quality and capital position.

The U.K. government's spent £45.2 billion rescuing RBS in 2009 at an average price of 49.9p.