This is a massive week for the banking sector in the UK. Not only are 3 of the major High St banks giving their Q2 earnings reports and outlooks for the rest of the year, but the Bank of England’s monetary policy meeting on Thursday will also bring a decision regarding interest rates. Many analysts are predicting a rate rise on Thursday, and if this happens, it would be only the second since the ’08 crash.
To help you dissect the reports as they come out, we have prepared a summary of facts, figures, estimates and opinion on Lloyds, Barclays and RBS so that you can keep yourself ahead of the market. And as always, feel free to call our brokers directly on 0121 454 0770 for the latest analysis.
REPORTING WEDNESDAY 1ST | EST. EPS: 7.21p | YTD -4.63%
- The Q1 report for the Lloyds Banking Group saw a 6% rise in pre-tax profits and current estimates see that value dropping in the half year publication due to the ongoing PPI saga that has seen Lloyds payout a total of £18.8bn so far. Forecasts for EPS stand at 7.21p and dividends at 3.40p. Lloyds underwriter, Hiscox, yesterday reported a pre-tax profit of £125m.
- On Monday, MPs wrote to the FCA to voice their stern displeasure with the compensation and treatment of victims of fraud, especially small businesses, and have called for action to be taken. Lloyds are also still dealing with renewed criticism regarding the fraud at HBOS Reading. They remain under investigation from regulatory and law enforcement agencies and may face further fines of up to £1bn.
REPORTING THURSDAY 2nd | EST. EPS: 19.79p | YTD -3.94%
- Barclays will look to improve their figures following a Q1 report that was blighted by PPI payouts and a £1.4 settlement with the US Department of Justice. Strong figures are expected from the investment branch of the bank with current estimates of a revenue of £2.6bn being forecasted.
- An element of concern for investors will include the news that the Serious Fraud Squad are looking to reopen charges relating to its fundraising with Qatar back in 2008 and the uncertainty US activist investor Sherborne may bring if figures disappoint.
REPORTING FRIDAY 3rd | EST. EPS: 25.73p | YTD -7.48%
- After posting its first profit in over 10 years in the Q1 report, RBS will look to continue the upward trend. Whilst year to date performance has lagged following a drop off in May, recent performance has improved in line with the general UK banking sector seeing > 4% gains in the last 5 days. Other points that investors will look to is the potential lifting of a block on divided payments and how the bank sees its outlook towards a restructure into retail.
- It was also announced that the FCA will not be taking action against RBS in relation to mistreatment of small businesses following the financial crisis. While it was reported that the RBS Global Restructuring Group had stripped assets of some small firms following 2008, the FCA determined that the Group was unregulated and couldn’t take action. RBS had set aside £400m in compensation so this ruling will come as a great boost before reporting.