Newspaper article The Evening Standard (London, England)

Focus on the Bank Fortunes in Thin Trade

Newspaper article The Evening Standard (London, England)

Focus on the Bank Fortunes in Thin Trade

Article excerpt

Byline: MICKEY CLARK

BARCLAYS kicks off the bank reporting season for real tomorrow with the focus of attention likely to be on provisions for bad and doubtful debts.

A profits warning from HSBC earlier this month revived the debate about debt levels among the lenders, although, in the case of HSBC, much of the blame was attributed to its US operation. Analysts say the banks will still have done well last year, and collectively should produce pre-tax profits in the region of [pounds sterling]40 billion.

Barclays fell 512p to 776p, while Lloyds TSB drifted 12p to 605p, HSBC rose 4p to 918p and Royal Bank of Scotland put on 8p at 2125p. Meanwhile, Lloyds is reckoned to be putting its Abbey Life insurance subsidiary up for sale with an expected price tag of [pounds sterling]1 billion in an attempt to offset losses in the struggling division.

Other markets could not provide much of a lead for City investors today.

Wall Street resumes trading this afternoon after the weekend break and Hong Kong is closed to celebrate the Chinese New Year. That left Tokyo, which traded higher in thin trading.

Turnover in the London market remained at a low ebb, with the FTSE 100 index up 18.2 at 6437.7.

Reed Elsevier, which last week agreed to sell off its educational publishing business, has been downgraded from buy to hold by US brokerage Citigroup.

It has also raised its target from 600p to 650p. Citigroup points out

that the jump in share price that greeted Reed's announcement looks to have fully valued the still-strong fundamentals of the business.

United Utilities marked time at 770p despite being downgraded by US broker Goldman Sachs. City speculators feel EMI remains vulnerable to takeover following last week's shock profits warning - its second this year.

Reports at the weekend claimed the music publisher is examining a radical plan to borrow [pounds sterling]1 billion against its prized publishing business, which manages the rights to more than a million songs. …

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