The annual general meeting of RBS will be the big focus for markets on Wednesday, with any talk of restarting dividends likely to attract the most attention.
Meanwhile, value retailer B&M European Value Retail is expected by analysts to see a drag on its fourth quarter like-for-like sales in full-year results as the impact from the ‘Beast from the East’ continues its way through the balance sheets of various companies.
For economic data, a fresh batch will arrive from across the Atlantic with the US Q1 GDP second reading along with the US ADP employment report, US international trade on goods data, and the US Federal Reserve Beige Book.
RBS dividend talk will be the main interest
The main blue-chip focus will be on Royal Bank of Scotland Group PLC‘s (LON:RBS) annual general meeting on Wednesday, with the bank likely to face questions over the timing of resuming dividend payments.
The state-owned lender is reportedly considering asking for permission to restart dividends after making progress in resolving legacy issues and returning to an annual profit for the first time in a decade.
The dividends could be as generous as that paid by Lloyds Banking Group PLC (LON:LLOY), a source told The Times. The group has been banned from paying dividends since its £45.5bn taxpayer bailout 10 years ago during the financial crisis.
Past misconduct has weighed on the bank’s shares and earnings, preventing RBS from resuming dividends. But in May the group made headway in putting its legacy issues behind it after agreeing a US$4.9bn settlement with the US Department of Justice to end an investigation into the sale of mortgage-backed securities.
RBS has also made progress in its turnaround plan, swinging to a profit of £752mln in 2017 after nine years of losses.
Meanwhile, there are reports that its balance sheet could receive a boost from a proposed merger between HSBC Holdings PLC (LON:HSBA) affiliate Saudi British Bank (SABB) and RBS-backed Alawwal Bank.
The deal would allow RBS to wind down its holding in the Saudi Arabian bank and would cut risk-weighted assets, paving the way for the government to sell down its 71% stake.
Chancellor Philip Hammond has suggested he is waiting for the bank to resume dividends and for its share price to rise before selling the government’s shares.
S'no fun for B&M European Value Retail
FTSE 250 discount retailer B&M European Value Retail SA (LON:BME) will release its full-year results on Wednesday 30 May.
City analysts are predicting that the stores group will report a strong year, albeit with some potentially slower like-for-like growth in the fourth quarter due to severe weather conditions in the UK.
Analysts at Deutsche Bank commented: “After a strong performance through the Q3 peak and good momentum in January and February, we expect that the snow somewhat impacted performance in the final month of the company's year.”
They added: “We assume a 300bps drag to Q4 LFLs from the weak month, and as a result cut our FY Mar-18 forecasts by c.2% (though leave Mar-19 and Mar-20 forecasts unchanged). For Q4 we model B&M UK LFLs +2.3% and for FY Mar-18 we forecast Adj EBITDA £280mln, Adj PBT £215mln and Adj dil EPS 17.1p.”
In a trading update for the 13 week period between 24 September to 23 December 2017 in January, B&M reported a solid Christmas period, with group sales revenue growing 22.7% at constant currency to £969.8mln, up from £789.1mln for the same period the year before, with "continued strong sales and operational performance" during its peak trading period.
Significant events expected:
Wednesday May 30:
AGM: Royal Bank of Scotland Group PLC (LON:RBS)
Finals: B&M European Retail PLC (LON:BME), De La Rue plc (LON:DLAR), LondonMetric Property PLC (LON:LMP), Telford Homes plc (LON:TEF), Trans-Siberian Gold PLC (LON:TSG)
Interims: Nexus Infrastructure PLC (LON:NEXS), Oxford Metrics PLC (LON:OMG)
Economic data: US Q1 GDP second reading; US ADP employment report; US international trade on goods; US Federal Reserve Beige Book