Week Ahead: Tax-payers' banks set to report

17th Feb 2012 13:09

The bean-counters at Her Majesty's Treasury will be taking more than a passing interest in company results next week as part-nationalised lenders Royal Bank of Scotland (RBS) and Lloyds Banking both publish full year results.Forecasts by investment analysts can be made to look daft by unforeseen non-cash adjustments but for what it is worth market consensus is for RBS to make £3.37bn in profit before tax on revenue of £27.0bn, while Lloyds is tipped to report a pre-tax loss of £355.7m on revenue of £20.6bn.The median value of the range of market forecasts should be treated with suspicion, however, as each analyst's forecast is likely to be based on a different interpretation of what the so-called "headline" or "underlying" figure is. This suspicion is strengthened by the fact that Nic Clarke, the banking analyst at broker Charles Stanley, is about a billion pounds off consensus with his RBS forecast and about £2.7bn north of consensus with his Lloyds prediction.As Clarke points out, RBS's third quarter profits were distorted by non-operating items such as a charge for movements in the fair value of own debt of £2,357m, compared to a gain of £339m in the second quarter. On an operating profit basis RBS reported a profit of £2,198m in the first nine months of 2011, compared to £1,858m in the same period in 2010.The situation at Lloyds is equally confusing, as Clarke explains."On 8 November, Lloyds Banking Group (LBG) issued an interim management statement in which its stated that in the first nine months of 2011 it made a statutory loss before tax of £3,858m (2010: profit of £1,967m). LBG also reported that profit before tax fell by 30% to £1,748m, in the first nine months of 2011, on a combined businesses basis." Wait. There is more."This differs from the statutory results as it is before a number of items such as the integration, simplification and EU mandated retail business disposal costs of £1,066m (2010: cost of £1,172m), volatility arising in insurance businesses of -£737m (2010: £110m), amortisation of purchased intangibles -£428m (2010: -£478m), provision in relation to German insurance business litigation of - £175m (2010: £0m), the cost of the £3,200m PPI insurance provision this year and a pension curtailment gain of £1,019m in 2010," Clarke continued.No wonder the front pages of the British press concentrate on the altogether more easily understood, though still occasionally opaque, remuneration of the banks' top executives.Moving on to a marginally simpler set of results to interpret, insurance group RSA is expected to announce a profit before tax of £722.2m on gross written premiums (GWP) of £8.26bn.Earnings per share are tipped to rise to 14.1p from 9.8p while the stock's legion of fans who bought the shares for the dividend income will probably be reasonably happy if the full year dividend rises to 9.29p from 2010's 8.82p, as forecast.Credit Suisse thinks the results will be "solid, but with mixed messages for the future.""On the positive side, we expect strong growth in GWP to continue (+9% forecast) while improvements in accident year results should underpin a sub-95% combined ratio. However, we expect the result will also demonstrate evidence of a gradual decline in investment yields (excluding gains) and a fading effect of reserve releases which have been at elevated levels in recent results," Credit Suisse predicted.The combined ratio is a measure of how wisely an insurer has written business; a lower number is better than a higher one.While Thursday is the big day for company results watchers, Wednesday is the red letter day for economists, as the Bank of England will release the minutes of the February meeting of the Monetary Policy Committee (MPC).The minutes will go into more depth on the reasoning behind the MPC's decision to add another £50bn to the asset purchase programme, taking it up to £325bn.The official word on the day the decision was announced was: "In the light of its most recent economic projections, the Committee judged that the weak near-term growth outlook and associated downward pressure from economic slack meant that, without further monetary stimulus, it was more likely than not that inflation would undershoot the 2% target in the medium term."Monday February 20INTERIMSDotDigital Group, International Ferro Metals GroupQUARTERLY EX-DIVIDEND DATESchlumberger Ltd.Q4Petroleum Geo Services ASAFINALSAFC Energy, CSR, Lo-Q, Petroleum Geo Services ASA, XP Power Ltd. (DI)EGMSWestmount Energy Ltd.AGMSForesight 2 VCT, Renovo GroupFINAL DIVIDEND PAYMENT DATEUnited DrugTuesday February 21INTERIMSAlbemarle & Bond Holdings, Dechra Pharmaceuticals, GenusINTERNATIONAL ECONOMIC ANNOUNCEMENTSConsumer Confidence Indicator (EU) (10:00)FINALSAmec, Devro, Dragon Oil, Drax Group, Heavitree Brewery, Quarto Group Inc., Rathbone Brothers, SEGROIMSSSafestore HoldingsEGMSAmiad Water Systems LtdAGMSAndor Technology, Blackrock Frontiers Investment Trust, Emblaze Ltd., Leed Petroleum, Optos, Titon HoldingsUK ECONOMIC ANNOUNCEMENTSPublic Sector Finances (09:30)Wednesday February 22INTERIMSA&J Mucklow Group, Barratt Developments, Galliford Try, HaysINTERIM EX-DIVIDEND DATEDowning Absolute Income VCT 2, Heath (Samuel) & Sons, Mid Wynd International Inv Trust, Mountview Estate, PZ CussonsQUARTERLY EX-DIVIDEND DATEBarclays, CarnivalINTERNATIONAL ECONOMIC ANNOUNCEMENTSExisting Home Sales (US) (15:00)Industrial New Orders (EU) (10:00)MBA Mortgage Applications (US) (12:00)Q4Millennium & Copthorne HotelsFINALSAnglo Pacific Group, Filtrona PLC, Logica, London Capital Group Holdings, Millennium & Copthorne Hotels, Rexam, St James's Place, Telecom Egypt SAE GDS (Regs), Travis PerkinsSPECIAL EX-DIVIDEND PAYMENT DATEF&C Managed Portfolio Trust Income Shares, Independent Inv TrustEGMSBanco de Chile ADRAGMSBanco de Chile ADR, Gooch & HousegoUK ECONOMIC ANNOUNCEMENTSBoE Interest Rate Minutes (09:30)FINAL EX-DIVIDEND DATEBrunner Inv Trust, Chrysalis VCT, Domino's Pizza UK & IRL, Framlington AIM VCT, Independent Inv Trust, Jersey Electricity 'A' Shares, Reckitt Benckiser Group, Throgmorton TrustThursday February 23INTERIMSAshmore Group, Centaur Media, Go-Ahead Group, Kier Group, Oil & Gas Development Company Ltd. GDR (Reg S), Redrow, Sinclair Is PharmaQUARTERLY PAYMENT DATEMerchants TrustINTERNATIONAL ECONOMIC ANNOUNCEMENTSBloomberg Consumer Confidence (US) (14:45)Continuing Claims (US) (13:30)Crude Oil Inventories (US) (15:30)House Price Index (US) (15:00)IFO Business Climate (GER) (09:00)IFO Current Assessment (GER) (09:00)IFO Expectations (GER) (09:00)Initial Jobless Claims (US) (13:30)Q4Hellenic Telecom Industries SA ADS, Lancashire Holdings, Wentworth Resources LtdFINALSAvocet Mining, British American Tobacco, Capita, Capital Shopping Centres Group, Centrica, Hellenic Telecom Industries SA ADS, Informa, Lancashire Holdings, Mondi, New World Resources A Shares, Royal Bank of Scotland Group, RSA Insurance Group, STV Group, Wentworth Resources LtdAGMSAlternative Investment Strategies Ltd. Sterling Hedged Shares, Bankers Inv Trust, Datong, easyJet, Electra Private EquityUK ECONOMIC ANNOUNCEMENTSBBA Mortgage Lending Figures (09:30)CBI Industrial Trends Surveys (11:00)Monthly Industrial Trends Survey (11:00)FINAL DIVIDEND PAYMENT DATERenew HoldingsFriday February 24INTERIMSAsian Citrus HoldingINTERIM DIVIDEND PAYMENT DATEACM Shipping Group, Fletcher King, Foresight 3 VCT, Foresight 4 VCT, Games Workshop Group, Ingenious Entertainment VCT 1, Ingenious Entertainment VCT 1 'C' Shares, Ingenious Entertainment VCT 1 'D' Shares, Ingenious Entertainment VCT 2, Ingenious Entertainment VCT 2 'C' Shares, Ingenious Entertainment VCT 2 'D' Shares, Ingenious Live VCT 1, Ingenious Live VCT 2, NCC GroupQUARTERLY PAYMENT DATEPicton Property Income LtdINTERNATIONAL ECONOMIC ANNOUNCEMENTSNew Homes Sales (US) (15:00)U. of Michigan Confidence (Final) (US) (15:00)Q4Telefonica SAFINALSBerendsen, Hammerson, Lloyds Banking Group, New Britain Palm Oil Ltd. (DI), Nord Gold (GDR Reg S), Rightmove, Ruukki Group (DI), Telefonica SA, William HillAGMSBrewin Dolphin Holdings, Invista European Real Estate Trust, LonZim, OMG, PowerShares Palisades Global Water Fund, Rock Solid Images, Sinclair (William) Holdings, Sunrise Resources , Tertiary MineralsTRADING ANNOUNCEMENTSMail.ru Group GDR (Reg S)UK ECONOMIC ANNOUNCEMENTSGDP (output, income & expenditure) (09:30)Index of Services (09:30)FINAL DIVIDEND PAYMENT DATEBlackrock Frontiers Investment Trust, NB Global Floating Rate Income Fund Ltd GBP, NB Global Floating Rate Income Fund Ltd USD, Titon Holdings, Victrex, Zytronic