Friday preview: Banks stay in focus as RBS, StanChart report
(ShareCast News) - Friday sees the release of more bank earnings, with Royal Bank of Scotland and Standard Chartered on the slate following numbers from HSBC, Lloyds and Barclays earlier in the week.
UBS, which rates RBS at 'neutral', said the management team is due to present a new strategic plan with the bank's full-year 2016 results.
"Bulls expect an expanded restructuring programme to improve efficiency in a lower-for-longer environment, leading to significant earnings per share upgrades. Bears worry about the restructuring cost capital drags of subjecting RBS to another round of reengineering. They also, rightly, point to the bank's already-high price-to-earnings ratios."
Standard Chartered will also be in focus, with UBS pointing to consensus expectations for underlying profit before tax of -$31m for the fourth quarter on a revenue base of $3.4bn, costs of $2.8bn and total provisions of $628m.
"We expect the company to post a solid 13.5% CET1 ratio as risk-weighted assets continue falling through the rundown of the liquidation portfolio and other restructuring efforts. We think the key focus will be on income trends and outlook, as income growth remains crucial to StanChart being able to expand return on equity."
Earnings are also due from British Airways and Iberia parent International Consolidated Airlines Group, education publisher Pearson and property website Rightmove.
BBA mortgage approvals
BBA Mortgage approvals are due out at 0930 GMT.
HSBC pointed out that the BBA mortgage approval measure was very strong in December, rising 5.4% month-on-month to 43.2k.
"The Bank of England measure grew by less, however, and we think there could be some scope for correction in the BBA number in January: we look for a small fall back to 42.6k."
University of Michigan sentiment
In the US, University of Michigan consumer sentiment for February is scheduled for release at 1500 GMT.
The Uni Michigan consumer confidence index rose by a combined 11 points in November and December, was roughly steady in January, and declined by around three points in the preliminary reading for February.
HSBC expects the final reading for February at 96.0, scarcely changed from the preliminary reading.
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