RBS annual results

Royal Bank of Scotland are due to report their annual results on Thursday. 40% of my portfolio is in RBS shares at the moment, so I'll be an avid reader. I'm optimistic - there have been a lot of scare stories in the press about rights issues and cut dividends, but I haven't seen any facts to back up the scaremongering.

For the record, so that I can revisit and see how wrong I was, I expect:

• Some further, relatively minor, writedowns due to subprime or similar. Less than £1bn.
• Record profits.
• A moderate increase in the dividend.
• Confirmation that a rights issue is not on the cards.
• A subsequent jump in the share price, probably settling at about 425p.

I can't decide if I want good news or bad news... I think the ideal would be some superficially bad news (e.g. a big one-off writedown) that depressed the share price to about 300p and allowed me to increase my stake at a good price. Arguably RBS is already too large a proportion of my portfolio at 40%... but I expect to invest more over the next couple of months, which would take the proportion down to a more healthy 12%. I'm not averse to holding a large-ish proportion of the total in one share if that is demonstrably undervalued, and at 300p a further bite of the cherry would be irresistable.

Here's how my portfolio performance looks now. At the moment I'm sitting on a modest 1% loss - if RBS goes up to 425p, then other things being equal I'll instead be up about 3%. In the long run it's all academic of course... but I would like my little graph to look a bit healthier.