Bailed-out banks forecast to reveal mixed fortunes

Theres no place like it for Home Retail Group which is expected to announce a 130m rise in profits. Picture: James Clare

BRITAIN’S bailed-out banks take the stage this week, with results due from Royal Bank of Scotland and Lloyds Banking Group.

Analysts at Numis forecast that RBS, which is 80 per cent owned by the taxpayer, will unveil a 45 per cent drop in statutory pre-tax profits to £904 million for the first quarter, due to higher restructuring charges as the bank continues to shrink.

Brokers at Keefe, Bruyette & Woods estimate Lloyds’ first-quarter underlying profits will lift by 16 per cent to £2.1 billion. In February, Lloyds paid a dividend for the first time in seven years since it was rescued by the taxpayer after announcing a four-fold rise in annual profits to £1.8bn.

WEEK AHEAD

Today

• Centrica – A first–quarter trading update is due from the Scottish Gas parent company, which saw adjusted operating profits tumble 35 per cent to £1.75 billion last year, reflecting “extreme” weather and falling oil and gas prices.

• CBI – The employers’ organisation releases the latest industrial trends survey data.

Tomorrow

• GDP – Recent PMI surveys point towards a first–quarter growth figure of 0.7 per cent, which would be up on the fourth quarter’s 0.6 per cent, but IHS Global economist Howard Archer says there is a “very real risk” growth could have slowed to 0.4 per cent.

• Scottish Franchise Week – Events kick off with a seminar at the Edinburgh offices of law firm Harper Macleod.

Wednesday

• Stagecoach – The transport giant updates investors on trading ahead of its financial year–end. Last month the Perth–based group reported healthy growth at its UK bus and rail operations, but said demand in the US had been hit as low petrol prices had encouraged more people to take to travelling by car instead.

• Alliance Trust – The Dundee wealth manager holds its annual meeting, where plans by a US hedge fund to install three new non–executives onto the board will be voted on by shareholders.

• Home Retail Group – The Argos and Homebase parent posts annual results, and analysts expect a 13 per cent rise in pre–tax profits to £130 million thanks to improved margins and tight cost control.

Thursday

• Royal Bank of Scotland – First–quarter results are due from the state–backed lender, which is continuing to scale back its overseas presence.

Friday

• Lloyds Banking Group – Profits are forecast to have risen in the first quarter as its asset quality and margins improve.