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Lloyds Banking and RBS to give post-Brexit vote updates

Last updated: 06:38 24 Oct 2016 BST, First published: 05:43 24 Oct 2016 BST

Lloyds Banking

Lloyds Banking Group and Royal Bank of Scotland issue trading updates against a background of private investor unrest.

For Lloyds, the disgruntlement is down to the government’s decision not to offer the remnants of its once large stake in the lender to Joe Public.

Deutsche Bank is expecting the third quarter update to be relatively quiet, which would come as a relief after a long-running saga of what Lloyds refers to as “conduct provisions” - mis-selling scandals and the like.

It expects margins will have fallen slightly quarter-to-quarter, albeit in line with management guidance, while the movement in the pension deficit “offers the most potential for uncertainty”, though a payment protection insurance charge would not be a surprise.

“We expect market focus to remain firmly the outlook for 2017 and beyond, particularly for margins, which we forecast to deteriorate from mid-2017,” Deutsche said, as it cut its target price to 57p from 59p.

As for RBS, investor dissatisfaction is largely down to a prolonged period of tryng to recover from previous, cataclysmic mistakes.

Deutsche is not expecting a significant change in underlying performance in a quarter that followed hot on the heels of the Brexit vote and a cut in interest rates.

“Of particular interest this quarter will be RBS’s core loan franchise growth: we expect this to be slower in 3Q16. We expect guidance to be updated (as usual) at FY results rather than 3Q,” Deutsche said.

“Elsewhere we have updated forecasts for FX tailwinds in Ulster Bank, and better revenue performance in the investment bank. Our TP rises 1p to 171p, but we retain our Sell rating,” Deutsche said.

A decent defensive play and one for the yield investors is how one leading City broker described GlaxoSmithKline plc (LON:GSK) ahead of the drugs giant’s third-quarter figures

JP Morgan Cazenove said it expects Glaxo to restate its guidance for the year of 11-12% growth in earnings per share (EPS), although it admits “this could ultimately prove conservative”.

For the three months ended September, the broker said revenue growth measured in the local currencies would grow by 4% from £6.13bn this time last year. EPS is set to increase by 10% from 23p.

“We see a solid quarter, and we also expect consensus to make minor upgrades on a reported basis post the quarter, reflecting recent foreign exchange moves, though the recent forex moves are likely already partly reflected in the current share price,” Caz said in a note to clients.

Significant announcements expected

Monday

Trading statements: Petra Diamonds Ltd (LON:PDL),

Tuesday

Interims: Atlas Mara Co-invest Ltd (LON:ATMA), Whitbread plc (LON:WTB)

Trading statements: Anglo American PLC (LON:AAL), GKN (LON:GKN), National Express Group (LON:NEX), St James’s Place PLC (LON:STJ),

Wednesday

Interims: GlaxoSmithKline plc (LON:GSK), JZ Capital Partners Ltd (LON:JZCP), Torchmark Corporation (LON:TMK)

Finals: Earthport plc (LON:EPO)

Trading statement: Antofagasta PLC (LON:ANTO), Cobham PLC (LON:COB), Genel Energy PLC (LON:GENL), Lloyds Banking Group PLC (LON:LLOY)

Thursday

Interims: Bloomsbury Publishing PLC (LON:BMY), C&C Group PLC (LON:CCR)

Finals: Debenhams PLC (LON:DEB), Redefine International (LON:RDI)

Trading statements: Barclays PLC (LON:BARC), BT Group PLC (LON:BT.A), Henderson Group PLC (LON:HGG), Inchcape PLC (LON:INCH), RELX PLC (LON:REL), Kaz Minerals PLC (LON:KAZ)

Friday

Trading statements: Berendsen PLC (LON:BRSN), Elementis PLC (LON:ELM), Royal Bank of Scotland PLC (LON:RBS), WPP group PLC (LON:WPP)

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