Banks to dominate busy week of figures

Feb 22 2010 by Iain Laing, The Journal

RESULTS from Royal Bank of Scotland and Lloyds Banking Group will dominate a busy week, which will also see figures from Centrica and North East transport giant Go Ahead.

Part-nationalised Royal Bank of Scotland is likely to find itself at the centre of another media storm next week with a £1.3bn bonus pot for its investment bankers, despite a second year of huge losses.

After a record £24.1bn slide into the red during 2008, consensus forecasts have pencilled in another hefty pre-tax loss of £5.3bn for last year when results are revealed on Thursday.

Lloyds Banking Group is expected to make its own latest plunge into the red on Friday with analysts forecasting a £3.8bn pre-tax loss.

The group is 41% owned by the taxpayer after swallowing the toxic debts of HBOS although the company at least managed to avoid the Government’s asset protection scheme, which would have seen the public stake rise above 60%.

The firm instead managed to garner support for a record UK rights issue as part of a £20bn-plus fundraising completed in November, although bad debts are still likely to a major millstone around the combined bank’s figures.

British Gas owner Centrica is expected to report a huge rise in profits at its residential business next week as households cranked up the heating to beat the winter cold. It became the first of the “big six“ UK energy bills to lower gas prices recently, but operating profits are still expected to hit £554m – up from £379m in 2008. While British Gas will also have gained from last month’s snow, which falls outside the period of the results, the figures for the group as a whole will show operating profits down 7% to £1.82bn in 2009.

National Express reports annual figures on Thursday after a torrid year for the embattled rail and bus firm. National Express handed its loss-making East Coast Main Line franchise back into state hands in November after running into trouble by overbidding for the deal before recession struck and crippled revenues from the franchise.

The company will also lose its East Anglian and c2c commuter deals in 2011 – three years early – after the embarrassing surrender of the franchise to the Government. Its latest figures showed rail revenues were still under pressure and annual profits are expected to be nearly half of the £202.4m in 2008 down to to £111.6m

Meanwhile, interims from Newcastle-based Go-Ahead, also on Thursday, may show improvements at its bus arm.

It said in December that, while rail profits were expected to be half last year’s £34.9m due to a reduction in Government subsidies, its bus business was forecasted to see interim profits slightly ahead of last year’s £31.4m.