Week ahead: Big bank report at half-way mark

SOME of Britain’s biggest banks will be firmly in focus as the half-year reporting season gets into full swing with figures from Barclays, Lloyds Banking Group and Royal Bank of Scotland all due.

Lloyds chief executive Antonio Horta Osorio will be among leading financiers under scrutiny as the reporting season for the half-year begins. Picture: Robert Perry

Barclays will kick off half-year results following reports it is planning to axe thousands more jobs as it speeds up a cost-cutting strategy after the departure of chief executive Antony Jenkins.

Hands-on chairman John McFarlane – who has taken over at the helm until a replacement is found – will be looked to for further clarity on cost cutting, while the group will also be pressed for reaction to the new surcharge on bank profits.

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• CBI industrial trends – The latest snapshot could well reveal a modest pick–up in manufacturing orders in July, largely due to improved domestic demand.


• GDP data – A pick–up in economic growth is expected to be shown when an initial reading of GDP is released. A number of economists expect it to have grown by 0.7 per cent in the second quarter after falling back to 0.4 per cent in the first quarter.


• CBI distributive trades – Analysts are expecting the report to highlight robust retail sales during the opening weeks of the summer.

• BoE loan approvals – Bank of England data is likely to show that mortgage approvals for house purchases picked up to be at a 16–month high of about 68,000 in June.

• Barclays – The group’s interims are expected to show a drop in investment banking revenues - down 9 per cent to £1.96 billion, according to Investec analyst Ian Gordon Morgan Stanley is forecasting group second–quarter underlying pre–tax profits to rise 5 per cent to £1.7 billion, but this would be a 9 per cent drop on the previous three months.

• Weir Group – The City will be looking to see what sort of impact the slowdown in the oil and gas sector is having on the Glasgow–headquartered firm. which has operations around the world.

• Royal Bank of Scotland – RBS slumped into the red by £446 million in Q1 after putting aside cash to cover the forex scandal, as well as restructuring charges. Half–year results are set to show a bottom–line loss of £300m, according to a number of City analysts. On an underlying basis, Morgan Stanley expects second–quarter operating profits to dip to £1.4bn from £1.63bn in the first quarter, which would also be sharply lower than the £2bn adjusted earnings reported a year earlier.

• Merlin Entertainments – Interim figures from the owner of Alton Towers will reveal the impact of last month’s rollercoaster crash that left five people seriously injured and led to a four–day shut down at the theme park.
• Centrica – The owner of British Gas and Scottish Gas will come under the spotlight when its new chief executive, Iain Conn, presents the findings of his wide–ranging review in a bid to stem losses

•Lloyds Banking Group – The bank is due to post yet more hefty provisions for PPI mis–selling as the industry struggles to put the scandal behind it. With industry PPI compensation now topping £20bn, Lloyds is expected to add another £1bn to its bill, including its recent record £117m fine by the City watchdog for the way it handled PPI complaints.