Preferreds tick up as week winds down; RBS reports surprise earnings boost, preferreds up

By Stephanie N. Rotondo

Phoenix, July 25 – As the week drew to a close, a preferred stock trader opined that investors were waiting until the following week to get their hands dirty.

“There’s a lot of earnings next week,” he said. “I think that’s what people are waiting on.”

Still, the market remained slightly higher, albeit on “very light volume,” according to a market source.

The Wells Fargo Hybrid and Preferred Securities index closed the session up 8 basis points. The index was pretty steady most of day – it was up about 5 bps in early trading – but there was a spike up at the end of the day.

Royal Bank of Scotland Group plc released preliminary quarterly results a week early on Friday. Buoyed by a surprise gain in profit, investors pushed the Edinburgh, Scotland-based bank’s preferreds upward.

The 7.25% series T noncumulative dollar preference shares (NYSE: RBSPT) increased 4 cents to $25.24. The 6.08% noncumulative guaranteed trust preferred securities (NYSE: RBSPG) were meantime up 16 cents at $24.07. The 5.9% noncumulative guaranteed trust preferred securities (NYSE: RBSPE) were 16-cents better as well, ending at $23.90.

On a percentage basis, the 6.35% series N noncumulative dollar preference shares (NYSE: RBSPN) were up the most, rising 36 cents, or 1.49% to $24.58.

RBS saw its pre-tax profit gain 81%, due largely to a decline in loan impairments. However, the company warned that ongoing legal issues could weigh on results in the coming quarters.

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