Friday preview: RBS reports third quarter interims

CYBG, the parent company of Clydesdale and Yorkshire Bank, said in a statement on Wednesday morning that it "has engaged in discussions with RBS and has made a preliminary non-binding proposal" for the Williams & Glyn operations. The European Commission has ordered the sale of the branches as part of a condition of the bank's £46bn taxpayer bailout in 2008.

“If a deal can be struck it would represent a significant milestone for RBS which needs to agree a disposal of W&G before the end of the year to avoid further intervention by the European Commission, including the potential appointment of a third party to oversee its sale,” said Shore Capital analyst Gary Greenwood.

“Disposing of W&G is also a key hurdle to overcome in terms of RBS being able to resume dividend payments / capital returns to shareholders and ultimately rid itself of government ownership.”

Investors will be looking for an update on the negotiations with CYBG in the quarterly results on Friday. They will also be interested in whether RBS confirms reports that the bank has held discussions with a group of five institutional investors, including Aviva, Legal & General and the Universities Superannuation Scheme, to settle a case over its £12bn rights issue.

Sky News reported on Wednesday that RBS will set aside more money to settle the claims brought against the bank on the rights issue. A deal is expected to be reached with some of its shareholders within weeks.

“The bank has yet to post an annual profit since being bailed out in 2008 with total losses in excess of £50bn already, and the likelihood is that we will see further provisions set aside in lieu of further litigation in this week’s numbers,” said CMC Markets’ Michael Hewson.

“In recent quarters the underlying retail business has been doing ok, posting profits in Q1 and Q2, unfortunately the bank can’t escape the anchor of its legacy issues, and this week’s update looks likely to continue that trend.”

Meanwhile, the government is expected to take another multibillion-pound hit on the value of its stake in RBS as the shares have plunged since the UK voted to leave the European Union on 23 June.

The Office for Budget Responsibility is set to recalculate the figure as part of its update on the public finances published alongside the autumn statement on 23 November, which is expected to show taxpayers are sitting on a near-£30bn loss after its bailout during the financial crisis.

The government has reduced its holding from 79% to 73% with the sale of £2bn worth of shares since saving RBS from collapse.

Friday 28 October

INTERIM DIVIDEND PAYMENT DATE
32Red, AA , Advanced Medical Solutions Group, Air Partner, BlackRock Latin American Inv Trust, Burford Capital , Central Asia Metals, Dignity, Ebiquity, EMIS Group, John Laing Group , John Laing Infrastructure Fund Ltd, JPMorgan Russian Securities, Keywords Studios, Learning Technologies Group , Maven Income & Growth 2 VCT, Mortgage Advice Bureau (Holdings) , Old Mutual, Premier Technical Services Group , Servelec Group , Smurfit Kappa Group, Sprue Aegis

QUARTERLY PAYMENT DATE
Real Estate Investors

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Price Index (GER) (13:00)
Employment Cost Index (US) (13:30)
Gross Domestic Product (US) (13:30)
Personal Consumption Expenditures (US) (13:30)
U. of Michigan Confidence (US) (14:55)

Q3
International Consolidated Airlines Group SA (CDI), International Consolidated Airlines Group SA (CDI), Royal Bank of Scotland Group

EGMS
Societatea Nationala De Gaze Naturale Romgaz S.A. GDR (Reg S)

AGMS
Ideagen, Reabold Resources

TRADING ANNOUNCEMENTS
Berendsen

UK ECONOMIC ANNOUNCEMENTS
Consumer Credit (09:30)
M4 Money Supply (09:30)
Mortgage Approvals (09:30)

FINAL DIVIDEND PAYMENT DATE
Abbey, Brooks Macdonald Group, Fulcrum Utility Services Ltd. (DI), ICBC Standard Bank, IG Group Holdings, Sky