The Week Ahead: RBS will need to allay analysts' fears of slowdown

Barclays and Lloyds TSB reported numbers towards the top end of forecasts last week and tomorrow traders will be looking out for results from Royal Bank of Scotland, the UK's second largest bank after HSBC, and nowadays one of only a handful of true global banking powers.

Analysts are predicting pre-tax profits in 2005 of £8.2bn, 60 per cent more than Barclays announced last week. However, it has not all been plain sailing for Royal Bank in the past 12 months so analysts will be paying particular attention to the details. After a period of superb share price performance powered by the acquisition of NatWest, the shares have stagnated in the past three years. There are also concerns that the chief executive, Sir Fred Goodwin, will announce another costly overseas purchase rather than returning some of the company's huge cash reserves to shareholders.

Earnings momentum has slowed and bank watchers will be looking for an improvement in return on invested capital. Shareholders should be looking for an enhanced share buy-back programme or even a special dividend.

TODAY: The South African life insurer Old Mutual reports its first set of results since completing the acquisition of its Swedish rival Skandia. The broker Williams de Broe expects some weakness in the share price as a result of the acquisition as many Scandinavian holders are likely to sell the stock. The strong rand will have helped the company, as will a strong South African stock market, which rose by 43 per cent last year. Analysts are expecting the company to report pre-tax profits of £1.5bn.

Pearson, owner of The Financial Times and Penguin Books, is expected to have made pre-tax profits of about £420m last year. Barring any surprises in the numbers, analysts will be keener to hear strategy for 2006 - a sale of the FT has been mooted, but the City will need a good deal of persuading that the company can remain in its present form and deliver the goods.

The market has already priced in good results from the recruiter Robert Walters after a bullish trading statement in December, so the company will need to confirm that further progress has been made in 2006 to support further upgrades.

Results: Full year - Alliance & Leicester; Datamonitor; Domino's Pizza; Faroe Petroleum; Hammerson; Old Mutual; Pearson; Persimmon; Raymarine; Robert Walters; Stadium Group; Ultra Electronics. First half - Ricardo.

TOMORROW: British American Tobacco will be in focus after the US activist investors Carl Icahn and Warren Lichtenstein made an unsolicited $10bn bid for the Korean cigarette manufacturer KT&G last week. Analysts will also be looking for comments on the smoking ban in public buildings due to come into force in 2007. BAT is a global player, so expect the impact to be played down. Forecasts are for £2.75bn of pre-tax profits.

There is still an outside chance of someone else bidding for Boots, scuppering its merger with Alliance UniChem, given the green light after the OFT decided not to refer the deal to the Competition Commission. Alliance gave the market an upbeat trading statement in December, so there should be no nasty shocks in its full-year numbers. Due to the Boots merger, forecasts are few and far between, but the company should announce pre-tax profits of about £280m.

Results: Full year - Alliance UniChem; BBA Group; Bodycote International; British American Tobacco; CSR; Freeport; GKN; Internet Business; PartyGaming; Rotork; Royal Bank of Scotland; St James's Place Capital; Stream Group; Taylor Woodrow; United Business Media. First half - Dechra Pharmaceuticals; Hays; NXT; Powerleague Group; Surface Transforms; Ultimate Leisure.

WEDNESDAY: More tobacco, banks and mining in focus as Gallaher, HBOS and Xstrata announce full-year figures. Williams de Broe thinks that recent consolidation speculation is a good reason to sell Gallaher shares, despite saying that it is the best-managed stock in the sector. A recent trading update from HBOS reassured the market, and analysts expect the UK's largest mortgage lender to report pre-tax profits of £4.8bn. Finally, Xstrata should follow its mining rivals by announcing record earnings of $1.7bn.

Results: Full year - Arena Leisure; Biotrace International; Devro; Filtrona; Gallaher Group; Genetix Group; HBOS; LogicaCMG; Lorien; Michael Page International; Molins; Staffline Recruitment; TDG; Wilson Bowden; Xstrata. First half - Morse; Pure Wafer.

THURSDAY: Results: Full year - Nipson Digital Senior; SHL Group; Standard Chartered; Tarsus Group; Trinity Mirror; UK Coal; William Hill. First half - Quayle Munro; SatCom Group.

FRIDAY: Results: None expected.