Market Watch

THE bank reporting season continues this week with further first-quarter figures, while Lloyds Banking Group also faces shareholders at its annual general meeting.

The Lloyds event in Edinburgh on Thursday comes after the group cheered investors with news that it had returned to profitability in the first quarter of the year.

Lloyds did not provide a profit figure, but news that it clawed out of the red marked a significant turnaround on the 6.3 billion losses reported for 2009 after the HBOS takeover and credit crunch left Lloyds with 24bn in bad debts.

But Pirc – a research and advisory consultancy that provides services to institutional investors – has warned the combined level of performance-related pay during 2009 was "excessive" and is recommending opposition to the Lloyds remuneration report at the meeting.

Royal Bank of Scotland – which gives its first-quarter update on Friday – has also come under fire over pay and performance targets, but said at its AGM last Wednesday that it would review those linked to share price after it emerged some had already been met.

The group's update follows increasing optimism in the market over its recovery plans, which has sent shares soaring above 50p.

HSBC will report its figures on Friday amid expectations for further improvements in its bad-debt charges. It too is subject to criticism over executive pay, after reports of an 800,000 cash and benefit package for chief executive Michael Geoghegan's relocation to Hong Kong.

HSBC reported a 56 per cent rise in underlying 2009 profits to $13.3bn (8.7bn) thanks largely to a 148 per cent surge in profits for its investment banking arm, HSBC Global Banking and Markets.

Credit Suisse analysts believe there will be further improvements in profits in the first quarter as investment banking returns continue to pick up and as HSBC's hit on loans turned sour reduces.

JD Wetherspoon's third-quarter trading update on Wednesday should give a refreshed portrait on the UK pubs market.

Profits before tax and exceptional items rose 17.5 per cent to 36.2m in the 26 weeks to 24 January on total sales up 4.1 per cent at 488.1m.

The pubs chain said it saw "good opportunities" to double the number of outlets over the next ten to 15 years.

Morrisons' new chief Dalton Philips will present his first update for the supermarket group on Thursday when it reports on trading in the three months to April.

The former Wal-Mart executive started at the helm of the Bradford-based chain on 29 March.

Its first-quarter update will come just days after his predecessor, Marc Bolland, takes up the top job at rival retailer Marks & Spencer.

Week ahead

TUESDAY

Aberdeen Asset Management (interims); Aer Lingus, G4S, Standard Chartered (trading updates)

WEDNESDAY

Wolfson Microelectronics (interims); JD Wetherspoon, Legal & General, Next, Provident Financial, Prudential (trading updates); BAE Systems, National Express, Savills (AGMs)

THURSDAY

Arriva, Morrisons, RSA Insurance, (trading updates); GKN, GlaxoSmithKline, Reckitt Benckiser, Lloyds Banking Group (AGMs)

FRIDAY

HSBC, ITV, Royal Bank of Scotland (trading updates)