RESULTS from Britain’s part- nationalised banks and oil giants BP and Royal Dutch Shell will guarantee a significant week for investors.
New Barclays boss Antony Jenkins will deliver his first set of figures on Thursday as the banking sector falls under the spotlight again in the third-quarter results season.
Mr Jenkins, formerly head of retail, took up the position of chief executive in August as Barclays reputation was in tatters from the fallout of the Libor rate-rigging affair.
The results will also be published on Marcus Agius’s last day as chairman at the bank, as he prepares to hand over the role to Sir David Walker on Thursday.
Barclays is expected to unveil adjusted pre-tax profits for the three months to September 30 of £1.7bn, up 27% on the same quarter in the previous year.
But this will not include an additional £700m hit for covering the cost of mis-sold payment protection insurance claims, nor a £1.1bn own credit charge.
The PPI mis-selling affair is just one of a series of reputation-scarring scandals to have hit Barclays, along with rigging Libor and mis-selling complex interest-rate swap arrangements to unwitting businesses.
The recent events are likely to overshadow any progress made at the bank as another strong performance from the investment banking arm drives the underlying performance.
Lloyds Banking Group is facing an additional charge for mis-sold payment protection insurance (PPI) claims of up to £1.5bn in its third quarter update on Thursday, brokers Credit Suisse have warned.
The forecast was made in light of the extra £700m set aside by Barclays and takes into account the size of Lloyds’ loan book. The total bill for the part-nationalised lender would as a result soar to nearly £6bn, and is bound to leave taxpayers wondering when they will get their money back.
Stripping out one-off items, including PPI charges, Credit Suisse has forecast pre-tax profits at Lloyds of £578m for the third quarter, compared to a loss of £727m in the previous three months.
Like Barclays before it, Lloyds’ entanglement in the PPI scandal is likely to overshadow progress that the 40% state-owned bank has made with its turnaround.
Elsewhere, Next is unlikely to spook investors with its trading update on Halloween as the high street giant prepares to reveal another rise in sales.
The fashion and homewares chain, which has around 540 stores, is forecast by brokers at Panmure Gordon to report a 1% rise in sales at its stores and a 14% increase in sales on its website, Next Directory, in the three months to October.
Next does not offer like-for-like figures.
Retail sales figures for September revealed a surge in sales of warmer clothing and back-to-school attire, which is expected to help Next’s figures.
Oil giant BP will face questions tomorrow over the impact of its recent £16.7bn deal with Russia’s Rosneft when it unveils its third quarter results. State-backed Rosneft agreed to buy BP’s 50% stake in its troubled TNK-BP joint venture for 17.1bn US dollars in cash and 9.7bn US dollars worth of Rosneft shares.
Investors have been left wondering how they will benefit from the deal, which will see BP grab a 19.75% stake in Rosneft as it becomes the world’s biggest publicly-traded oil company.