The Week Ahead: What’s the status of the five big UK banks?

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Lloyds Banking, RBS, Barclays, Standard Chartered and HSBC will report their financial accounts this week, while the Federal Reserve Open Market Committee reveal their January’s minutes on Wednesday.

Fund Strategy looks at some key events shaping the week and what to expect.

Monday 20 February

  • Hammerson (Q4 results)

Tuesday 21 February

  • HSBC (Q4 results)

The Share Centre investment research analyst Graham Spooner says:”With a significant amount of overseas earnings the shares have outperformed others in the sector post Brexit and are now at a three year high. Investors will be hoping for further signs of an improvement in performance, along with an update on key regions such as Asia.

“Other areas to concentrate on will be its efforts to reduce costs, organic growth, its dividend policy and its move away from high street branches as around 90% of its interactions with customers are now digital.”

  • InterContinental Hotels (Q4 results)

Spooner says:”Shares in the international hotel group have performed well over the past year. The company’s last trading update in October, covering the third quarter, reported a 1.8% rise in revenue per room although a strengthening in the dollar reduced that figure to flat at actual exchange rates.

“IHG expressed confidence in the outlook for the rest of the year and chief executive Richard Solomons reiterated that at the World Economic Forum meeting in Davos in January. The performance of the boutique hotels and operations in Asia will be the main points of interest for many investors, as will the impact of currency fluctuations on this very international business.”

Wednesday 22 February

  • Lloyds Banking (Q4 results)

Spooner says:”Like most other banks the group has been cutting jobs and branches in order to target £1.4 billion of savings, invest in digital services and products and target a 13.5-15 per cent return on equity. The company are now close to finishing the main restructuring, although there will be further branch closures.

“Investors will be hoping for no more PPI provisions and concentrating more on the future with regard to dividend payments, views on the UK post Brexit, its cost base target and the housing market.”

  •  Federal Open Market Committee meeting of January 31

Spooner says:”Janet Yellen, the FED chair, has been dropping very subtle hints that President Trump’s economic plans are causing some uncertainty. But what do the men and women who make up the FED’s rate setting committee, the FOMC, think? Do they believe that Trumponomics may warrant more interest rates hikes than had previously been forecast? Today’s minutes will throw some light on this question.”

  • UK GDP, second estimate: October to December 2016 – Office for National Statistics

In January, the ONS recorded a quarterly growth rate of a higher than expected 0.6 per cent in Q4.
Thursday 23 February

  • British American Tobacco (Final results)
  • Barclays (Q4 results)
  • Glencore (Q4 results)

Friday 24 February

  • Standard Chartered (Q4 results)

Spooner says:”The share price has staged a significant recovery over the past year and a number of analysts are more positive about the group, with hopes that the banking situation is stabilizing and that the momentum will continue in 2017.

“This is a bank that is focussed on emerging markets and has had a management shake-up and strategic review involving cutting costs and selling off riskier parts of the business. Comments on its outlook for Asia, especially China, Hong Kong and Singapore will be worth noting.”