Credit Suisse analysts are recommending that UK lender Royal Bank of Scotland launch a rights issue to strengthen its capital base, as its tier one capital is at two-thirds of the average for European investment banks.

A rights issue is needed to boost RBS's consolidated equity tier one capital ratio, estimated to be 4% for December 2007, compared with an industry average of 6.5% for European investment banks, according to Credit Suisse analyst Jonathan Pierce and his team.