London pre-open: Stocks seen lower amid concerns about Deutsche Bank

London stocks were set to open lower on Friday amid growing concerns about Deutsche Bank and the broader financial sector.

The FTSE 100 was set to open 66 points lower than Thursday’s close at 6,859.

The banking sector was likely to be in focus following reports on Thursday that a number of key funds had withdrawn money from Deutsche Bank, which currently faces a $14bn fine from the US Department of Justice for mis-selling mortgage-backed securities.

CMC Markets’ Michael Hewson said:” After hitting three decade lows earlier this week the last two days appeared to offer some respite to Deutsche Bank’s share price in European trading, as the shares managed to arrest some of the recent downward momentum.

“This looks set to get undone today after reports in the US that some customers had reduced their financial exposure to the bank, and moved some of their exposure to other firms. While these firms represent a fairly small part of the banks clients, as a weather vane in the current febrile environment, it doesn’t exactly represent a vote of confidence either, and sent the US listed shares of the bank to a record low.”

On the data front, the final release of second-quarter UK GDP is at 0930 BST. In the US, personal income and spending is at 1330 BST, Chicago PMI at 1445 BST and University of Michigan consumer sentiment at 1500 BST.

In corporate news, Royal Bank of Scotland Group announced its proposals to regroup its businesses and separate its essential banking services from investment banking, in order to comply with UK ring-fencing legislation.

The company said it will transfer most of its existing private, business and commercial customers from RBS plc to its current Scottish private bank Adam & Company in mid-2018, renaming it The Royal Bank of Scotland plc.

At the same time, RBS plc will be renamed NatWest Markets plc and continue to operate its CIB businesses.

FTSE 250 listed residential landlord Grainger is to buy a private sector build-to-rent development on the Former Yorkshire Post gateway site from YP Real Estate for £40m.

The development is expected to be completed in 2019 and once the properties are fully let it is anticipated to have an annual return on investment of about 7%.

IG Group has agreed to buy global news and research portal DailyFX and its associated assets from FXCM Inc. for a total consideration of $40m.

IG said the deal, which is expected to complete by the end of October, is part of its aim of becoming the default choice for active traders globally. The company said this transaction will “significantly enhance” its ability to acquire new clients and to engage with and improve the retention rates of its current clients.