Mergers, boardroom shifts and possibly even a profit warning are expected to add dramatic flair as the spotlight moves onto lenders of a very different hue on Thursday, with results from Virgin Money and Amigo Holdings.
Virgin Money UK (LON:VMUK) will be releasing its first set of results following its rebrand from Clydesdale and Yorkshire Bank at the end of October, but comes more than a year after CYBG agreed a £1.7bn deal to take over Virgin Money.
The most pressing item on the agenda will be the damage from £450mln of last-minute claims for mis-sold payment protection insurance (PPI) which the company said it received in August, the final month leading up to the PPI deadline.
Profits at all the major banks including RBS (LON:RBS), Barclays (LON:BARC) and Lloyds PLC (LON:LLOY) have all been smashed by PPI claims, with the latest compensation figures showing a total of £36.4bn payouts have been made since January 2011.
Shares have made a small recovery, hovering at 145p on Wednesday, since their September freefall.
Amigo in need of friends
Amigo Holdings PLC (LON:AMGO) shares have lost more than three quarters of their value since they floated in June last year amid a sharper regulatory spotlight on the guarantor lending sector and are slated by some analysts to warn of further tough trading.
Ahead of the loan provider’s half-year results on Thursday, founder James Benamor, via his 61% shareholder Richmond Group vehicle, made it clear he intends to play a more active role again, proposing the appointment of a non-executive director of the company.
With Beamor having stepped down from the board less three months after the company’s £1.3bn London stock market debut, this was a clear indication the situation has changed.
“It is possible that this could be a precursor to corporate action and we wonder whether Richmond may be wanting closer involvement with the group ahead of potentially taking the company private again or seeking a third-party buyer,” says broker Shore Capital.
“However, the latter may be difficult to achieve, in our view, given ongoing regulatory uncertainty facing the guarantor lending sector where Amigo is the clear market leader.”
The ShoreCap analysts said they “would not be surprised” to see the interim results accompanied by another profit warning “given difficult trading conditions and potentially increasing consumer complaints”.
Newly-weds Miton and PAM get into bed
Like Virgin, when Premier Miton Group PLC (LON:PMI) reports full-year results on Thursday, shareholders of the newly enlarged asset manager will be looking to see what details emerge about its recent merger, as well as an update on the weaker flows reported by UK rivals
In this case, the much-hyped merger of Miton with Premier Asset Management was only finally sorted this month, so the impact may not be huge yet, even though assets under management have swelled to £11.5bn.
Broker Liberum, while it sang the praises of the merger, warned investors to watch out for the company’s reliance on UK investors, where the sector has seen weaker flows due to political uncertainty, which has subdued the share price in recent months
Analysts expect average AUM to be flat in 2020, but made positive noises over the £7mln savings Premier Miton said it planned to trim by removing overlap at their head offices
“It creates a larger group with complementary products and distribution, it leads to greater diversification of fund management teams and AUM, and creates a stronger platform to retain and attract talent.”
Significant announcements expected for Thursday November 28:
Ex-dividends to knock 8 points off FTSE 100 index: International Consolidated Airlines Group SA (LON:IAG), Johnson Matthey PLC (LON:JMAT), JD Sports Fashion PLC (LON:JD.), National Grid PLC (LON:NG.), Vodafone Group plc (LON:VOD), Land Securities Group PLC (LON:LAND), Severn Trent PLC (LON:SVT),
Economic data: UK house price index