Newspaper article The Journal (Newcastle, England)

Last of Big-Five Banks Report Half-Year Results; Taking Stock in Association with RBS

Newspaper article The Journal (Newcastle, England)

Last of Big-Five Banks Report Half-Year Results; Taking Stock in Association with RBS

Article excerpt

Byline: Russell Lynch and Holly Williams

BANKS and insurers are under the spotlight this week as the half-year results season continues.

The last of the "big five" banking giants report interim figures, with HSBC kicking off proceedings today.

Having had direct exposure to America's crisis-hit sub-prime mortgage sector via US consumer lending arm HFC, HSBC has suffered more than most from the market woes.

Britain's biggest bank wrote-down USEUR17.2bn (pounds 8.7bn) last year on bad debts and credit crunch losses on investments.

In May, it revealed a further USEUR5.8bn (pounds 2.9bn) in losses.

The bank increased pre-tax profits in all major emerging markets, but the market is reportedly pencilling a slump of between 18% and 37% in interim pre-tax profits, with forecasts ranging from USEUR8.95bn to USEUR11.68bn (pounds 4.53bn to pounds 5.91bn). That would be a small fall compared to the sharp declines in profits reported by Lloyds TSB, Halifax Bank of Scotland and Alliance & Leicester.

Barclays results on Thursday are expected to show "significantly depleted earnings" at its investment banking arm. In April, it said the division suffered a reversal of fortunes in the face of hefty writedowns and stock market turmoil.

Barclays, which recently completed a pounds 4.5bn fundraising move, has so far revealed pounds 2.6bn in credit crunch related writedowns, with pounds 1bn already announced this year.

Citi is expecting Barclays' impairment losses to total pounds 1.6bn in the first half, with predictions for pre-tax profits to have shrunk by just under a third to pounds 2.8bn.

On Friday, NatWest parent Royal Bank of Scotland is the last of the top five to report. Now with its mammoth pounds 12bn rights issue under its belt, it is likely to stress the strength of its capital ratio following the balance sheet boost. But US bank Merrill Lynch recently raised fears of more fundraising to come. Life and pensions giant Standard Life cheered the market with better-than-expected first quarter figures but half-year sales out on Wednesday may not be so rosy.

Where worldwide sales of life and pensions saw an 8% hike to pounds 4. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.