The blue chip banking results roller-coaster ride reaches its last loop on Friday as Royal Bank of Scotland Group PLC and Standard Chartered PLC (LON:STAN) round of the sector’s 2016 reporting season.
RBS has already had a big boost this week after the majority taxpayer-owned bank confirmed on Monday that it has shelved plans to sell its Williams & Glyn chain, a move which could pave the way for resumed dividend payments in the future, although obstacles remain.
But for now the under-pressure lender is expected to report annual loss of about £5bn for 2016, which would mark the ninth straight year of losses as it continues to grapple with restructuring the government-rescued business and struggles with legacy scandal issues.
Last month, the 73% taxpayer-owned bank announced it had set aside a further £3.1bn for fines from US authorities over the way it packaged up and sold mortgages almost a decade ago.
However, RBS chief executive Ross McEwan pleased investors by signalling a return to profitability for the state-owned lender in comments made last weekend trailing the W&G move.
Meanwhile, Standard Chartered boss Bill Winters has also embarked on a major restructuring of the emerging markets-focused lender.
However, analysts at JPMorgan Cazenove downgraded their rating for StanChart to ‘neutral’ from ‘overweight’. at the start of this week because they think the risk/reward for the bank looks “less compelling”.
The US bank’s analysts said: “We believe that under CEO Bill Winters, StanChart is pursuing a more sustainable LT (long-term)recovery strategy, albeit one that will take time to deliver.”
Publishing problems ...
Aside from the banks, 2016 results from troubled educational publisher Pearson PLC (LON:PSON) will also be a focus on Friday, although the firm already provided its headline numbers and 2017 guidance in a trading update in January.
In a preview, analysts at Liberum Capital said they expect the FTSE 100-listed firm’s results “to demonstrate the extent of how poor cashflow is at Pearson and to show a stretched balance sheet position, driven by the collapse in US Higher Education courseware in Q4.”
Away from the blue chips, the market will be looking for better news from betting shop firm William Hill PLC (LON:WMH) , especially in terms of customer-friendly results which have made a major dent on profits over recent months.
In a preview, analysts at the Share Centre said: “Full year profits are expected to come in around £260m and investors will also be looking for an update on the level of mobile wagers and trading in Australia and the US.
“Any comments on the impact of the government’s expected clampdown on maximum bets on fixed odds betting terminals in its branches will also be of interest.”
Significant announcements expected on Friday:
Finals: Coats PLC (LON:COA), Jupiter Fund Management PLC (LON:JUP), Kennedy Wilson Europe Real Estate PLC (LON:KWE), Pearson PLC (LON:PSON), Royal Bank of Scotland Group PLC(LON:RBS), Rightmove PLC (LON:RMV), Standard Chartered PLC (LON:STAN), Standard Life PLC (LON:SL.), William Hill PLC (LON:WMH), TBC Bank Group PLC (LON:TBCG)