FTSE 100 movers: Lloyds leads index back over 6,000

The FTSE 100 was back over 6,000 on Thursday, erasing losses from the previous two days.

The blue-chip index was up 146.76 points (2.50%) to 6,013.94 by mid-afternoon.

Lloyds Banking Group was the big riser, after it saw underlying profit increase 5% to £8.1bn during the year, with an underlying return on equity of 15% - up from 13.6%.

Excluding TSB, which Lloyds sold to Spanish bank Sabadell in July, underlying profit grew 10%.

Total income was up by 1% to £17.6bn. Of that, net interest income grew 5% to £11.5bn, which the bank said was driven by further margin improvement to 2.63%.

Operating costs were lower at £8.3bn, despite the bank having additional costs from investment and simplification. Its cost-income ratio improved by 0.5 percentage points to 49.3%.

Lloyds made a statutory profit before tax of £1.6bn, down from 2014's £1.8bn, due to increased PPI charges.

The bank had PPI provision of £4bn during the year, including an additional £2.1bn in the fourth quarter, reflecting action on a proposed time-bar for claims.

The positive result boosted sentiment for the sector, with Royal Bank of Scotland and Barclays shares rising ahead of their results on Friday and Tuesday respectively.

The results of RSA Insurance Group's restructure and turnaround were seen in its 2015 results out on Thursday, making the company one of the big risers of the day.

The company’s core group premiums rose 1%, though overall group net written premiums were down 3% year-on-year, with the group blaming its disposal programme for the drop.

Group operating profit rose grew 43.3% to £523m, from £365m. Its Scandinavian operations accounted for £163m of that, Canada £182m and the UK £175m.

RSA Group's underwriting profit soared 437% to £220m, from £41m.

Core group combined ratio was 96%, down from 98.8%, with the company citing strong underlying results across the three regions.

BT Group investors were also pleased that Ofcom had given the company a reprieve over Openreach, but it may still be forced to spin off its infrastructure arm unless it effectively opens up the network to rivals and implements major reforms.

A review carried out by the telecoms regulator found under the current model of BT ownership Openreach lacks independence and "has an incentive to make decisions in the interests of BT".

It called for an overhaul of the division's governance to strengthen its independence from BT, making its own decisions on budget, investment and strategy, and be "required to serve all wholesale customers equally".

"Openreach management should be required to serve all wholesale customers equally, and consult them on its investment plans. There will also be greater transparency over how costs and assets are allocated between Openreach and the rest of BT," the regulator said.

Not only will BT have to open up Openreach's telegraph poles and ‘ducts’ that carry telephone lines, it must make it much easier for competitors to access this network.

Of the few fallers, Capita took the biggest hit after it posted a drop in full year profit but said it was targeting organic revenue growth of at least 4% this year.

For the year ended 31 December, reported pre-tax profit fell to £112.1m from £292.4m in 2014, as the company was hit by business exits and impairment charges.

During the period, Capita exited a number of small businesses, which either lacked strategic fit or had limited growth potential. It has three further businesses for sale of which one disposal completed last month.

On an underlying basis, however, before the cost of business exits and other non-underlying items, pre-tax profit was up 9% to £585.5m.

Meanwhile, revenue grew 7% to £4.67bn and the company lifted its total dividend per share to 31.7p from 29.2p.

FTSE 100 - Risers

Lloyds Banking Group (LLOY) 70.46p 13.28%
RSA Insurance Group (RSA) 439.90p 11.51%
Anglo American (AAL) 438.45p 7.00%
Royal Bank of Scotland Group (RBS) 245.30p 5.69%
Glencore (GLEN) 121.95p 4.81%
Barclays (BARC) 164.15p 4.72%
Royal Dutch Shell 'A' (RDSA) 1,614.00p 4.47%
BT Group (BT.A) 478.90p 4.46%
International Consolidated Airlines Group SA (CDI) (IAG) 554.00p 4.43%
Pearson (PSON) 802.50p 4.42%

FTSE 100 - Fallers

Capita (CPI) 1,014.00p -5.41%
Randgold Resources Ltd. (RRS) 6,465.00p -2.78%
easyJet (EZJ) 1,479.00p -2.31%
Rio Tinto (RIO) 1,831.00p -2.29%
Whitbread (WTB) 3,736.00p -0.37%
SABMiller (SAB) 4,165.00p -0.04%