Banking giants kick off reporting season

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The bank reporting season begins this week with half-year figures from Barclays, Lloyds Banking Group and Royal Bank of Scotland, which are expected to show the beleaguered sector’s return to health is continuing.

Barclays is first out of the blocks tomorrow, when chief executive Antony Jenkins is expected to report on the progress of a restructuring aimed at saving £1.7 billion. Some 3,800 jobs are being axed, which led to almost £514 million of costs in the first three months of the year.

Thursday brings interims from Lloyds Banking Group, and many analysts predict it will deliver operating profits of between £2.3bn and £2.6bn, up from £1bn a year ago, although it may take a further hefty provision against payment protection insurance mis-selling.

While no dividend is expected, some observers believe payouts could be resumed in the second half. Lloyds is also working on plans to spin off 631 branches under the TSB brand after a deal to sell them to the Co-operative collapsed in April.

The most hotly-anticipated results will be those from RBS, although the numbers risk being over-shadowed by the speculation about who will succeed Stephen Hester as chief executive. Two external candidates – BlackRock’s Mark McCombe and Lloyds deputy chairman David Roberts – have quit the race, leaving RBS retail head Ross McEwan as the front-runner.

But the appointment needs approval from the Treasury, which means an announcement may not accompany Friday’s figures. Investec analyst Ian Gordon has pencilled in flat underlying operating profits of £1.6bn for the first six months of 2013.

Elsewhere, broadcaster ITV – which last week acquired Shaun of the Dead and World’s End producer Big Talk – is tipped to deliver half-year adjusted profits of £264m tomorrow, up from £228m a year ago. Analysts will be looking for signs of a recovery in the advertising market as the wider economic turnaround continues.

Scottish Gas owner Centrica is expected to announce a 7 per cent rise in first-half operating profits to £1.55bn on Wednesday, while earnings at its residential arm are forecast to rise 1.4 per cent to £350m.