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Barclays and Royal Bank of Scotland set for healthy quarter but scandals drag on

Day ahead: Barclays and RBS to post good numbers but scandals won't go away

Rumblings of discontent are never far away from the banks and this time it is Barclays that is facing a possible a shareholder revolt.

New boss Jes Staley and Sir Ian Cheshire, chair of its ring-fenced bank, are in the cross-hairs of shareholder adviser group ISS, which is concerned over the whistleblower ruckus that blew up earlier this month.

Barclays to report healthy quarter...

It may overshadow what is likely to be very good set of first quarter results from the bank.

In February it revealed annual profits tripled to of £3.2bn from £1.2bn the prior year as it sold off non-core units.

Deutsche Bank left its forecasts for the current year unchanged, and nudged up forecasts for next year and the year after by 3%.

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But as Jes Staley’s unfortunate incident highlights, Barclays is still shooting itself in the foot.

It was fined £290mln by US and UK authorities in 2012 for rigging Libor, which sets the rate at which banks can borrow from one another but the case is still not closed fully.

The FCA has also reportedly re-opened its investigation into Barclays' 2008 emergency fundraising from Qatar after the bank handed over about 100,000 documents to the Serious Fraud Office.

RBS set for a profit?

Barclays discomfort may be highlighted for once by Royal Bank of Scotland PLC ( LON:RBS) where the quarterly update should be a relative straightforward affair.

Say it quietly, but analysts even expect the tax payer –owned bank to post a profit.

Not that it’s plain sailing. It never is with RBS .

The bank is waiting on the outcome of the Europe Commission's investigation into the government's proposal to ditch plans to sell the bank's Williams & Glyn business and instead set up a fund to help challenger banks.

This move could boost core earnings by around £300mln, according to Berenberg.

“We believe these benefits outweigh our expected £1.1bn cost of restructuring and reintegration (of which £750mln has occurred),” the bank said.

“Put differently, while the proposal reduces excess capital by 20p, RBS retains a business worth 30p and gains incremental certainty about the timing of capital returns.”

However, the total cost of the measure could be as much as £1.5bn, a document drawn-up by the Commission ahead of a consultation on the plan showed.

The lender is also facing a £125mln bill for legal costs as it defends itself against accusations of misleading investors over its financial position in the lead up to its 2008 rights issue.

RBS took a £3.1bn provision in its results to cover an expected US fine in its full year results over the way it packaged and sold mortgage backed securities.

Friday 28 April - RBS, Barclays, HSBC

Trading Statement: Ultra Electronics Holdings PLC (LON:ULE); Barclays PLC (LON:BARC); Rotork PLC (LON:ROR); Royal Bank of Scotland Group (The) PLC (LON:RBS)

Finals: Jersey Oil and Gas PLC (LON:JOG)

AGM/EGM: 28/04/2017 HSBC Holdings PLC (LON:HSBA); Bank of Ireland (Governor & Co of) (LON:BKIR)

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