The Week Ahead: RBS and Lloyds to post £12bn losses

Royal Bank of Scotland and Lloyds Banking Group will announce their 2009 results this week, but analysts predict both are some way from profitability. The two British giants, both of which have been propped up by the Government, are expected to be overshadowed by Barclays' stellar results from last week, which helped drive the stock up almost 20 per cent since the start of the week.

Barclays posted a full year pre-tax profit of £11.6bn, while RBS and Lloyds are expected to make a pre-tax loss of £6bn and £8bn respectively, according to City brokerage Charles Stanley. RBS saw a marked decrease in losses between the second and third quarters of 2009 as operating losses fell to £1.5bn from £3.5bn. Impairments at the bank, although remaining high at £3.2bn, also improved in the quarter.

"The market will be looking to see whether the positive news regarding RBS's capital position, a stabilising net interest margin and its improved cost income ratio continued in the final quarter of 2009," the broker said. But even if the worst is over, RBS will remain "a challenging investment before 2014 to 2015" based on the group's current earnings profile and share count, UBS said.

In contrast, the Swiss group predicted that Lloyds would return to profitability later in 2010, aided by an improved outlook on impairments, which in the third quarter stood at £5.2bn compared with £13.4bn in the first two quarters of the year. "We expect FY09 results to show the improving market trends and a better impairment picture which should reduce market concerns," said UBS.

Today: Results/updates: Albemarle & Bond Holding, Associated British Foods, Bunzl, Hammerson, Petra Diamonds, Waterman Group, XP Power.

Tomorrow: Results/updates: Brammer, Croda International, Dechra Pharmaceuticals, Drax Group, Elementis, Lighthouse Caledonia ASA, Minerva, Mondi, Morgan Sindall, Spectris.

Wednesday: Analysts are negative ahead of homebuilder Barratt Developments' interim results. Investec called Barratt the riskiest stock in the housing sector, while Numis pointed out the company was the second-worst sector performer. To round things off, UBS predicted that the company would suffer a pre-tax loss of £53m. Barratt was hit hard by the downturn due to its high debt level and significant spending commitments. Headline net debt peaked at £1.8bn in December 2007, from £277m net cash in June 2005. But the firm has since made serious efforts to reduce this number, analysts said.

Results/updates: Barratt Developments, Galliford, Henderson Group, Huntsworth, Jazztel, Kier Group, Logica, MJ Gleeson Group, Group, Mucklow A&J Group, Rathbone Brothers, St James's Place, Town Centre Securities, Travis Perkins.

Thursday: A slightly happier tale in the construction sector can be told of Redrow, which "represents to us a classic turnaround story," according to Investec. Steve Morgan, the founder of Redrow who left in 2000, returned as executive chairman last March and has redirected the firm towards its core strengths and made efforts to repair the balance sheet. But Morgan faces a near Herculean task,

Redrow was the hardest-hit housebuilder during the downturn in terms of operational performance, Numis said, but nonetheless its share performance has almost mirrored rival firms, including Barratt, because "the stock market has chosen to back Steve Morgan". Despite market support for leadership, the underlying returns of the business will only improve slowly and will lag behind other firms, the broker added.

It said: "Redrow will be the slowest housebuilder to recover as the low returns and poor cash dynamics from landholdings will reduce the amount of new land bought and the ability to pull it through to production."

Energy provider Centrica is expected to record an operating profit of £1.8bn for 2009, down 7 per cent from £1.94bn actual profit in 2008, according to analysts' consensus group forecasts.

Results/updates: Ashmore Group, BBA Aviation, British American Tobacco, Capita Group, Centrica, Communisis, Dunelm Group, Ensco International, Filtrona, Genus, GKN, Go-Ahead Group, Hays, Hunting, London Capital Group, Rank Group, Redrow, Royal Bank of Scotland Group, RSA Insurance Group, Segro, Sinclair Pharma, STV Group, Venture Production, Wilmington Group, WYG, 4imprint Group. Friday: Results/updates: Brit Insurance Holdings, Centaur Media, Colt Telecom Group, Crew Gold Corp, Davis Service Group, Helphire, Lloyds Banking Group, Minorplanet Systems, Ricardo, Rightmove, Serco Group, Test2-Earnings, William Hill.

Arts and Entertainment
The first film introduced Daniel Radcliffe to our screens, pictured here as he prepares to board the train to Hogwarts for the first time.
booksHow reading Harry Potter helps children grow up to be gay-friendly
Frank Lampard will pass Billy Wright and equal Bobby Charton’s caps tally of 106 caps against
sportFormer Chelsea midfielder in Etihad stopgap before New York contract
Arts and Entertainment
A scene from Aladdin is performed at the Tony Awards in New York in June
theatreBrit producer Lythgoe makes kids' musical comedy a Los Angeles hit
Usain Bolt of Jamaica smiles and shakes hands with a competitor after Jamaica won their first heat in the men's 4x100m relay
ebookA unique anthology of reporting and analysis of a crucial period of history
Chancellor George Osborne, along with the Prime Minister, have been 'complacently claiming the economy is now fixed', according to shadow Chancellor Ed Balls
i100... which is awkward, because he is their boss, after all
Arts and Entertainment
Adèle Exarchopoulos and Léa Seydoux play teeneage lovers in the French erotic drama 'Blue Is The Warmest Colour' - The survey found four times as many women admitting to same-sex experiences than 20 years ago
filmBlue Is The Warmest Colour, Bojack Horseman and Hobbit on the way
Kenny Ireland, pictured in 2010.
peopleBenidorm actor was just 68
Arts and Entertainment
Preparations begin for Edinburgh Festival 2014
Edinburgh festivalAll the best shows to see at Edinburgh this year
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Financial Analyst - Forecasting - Yorkshire

£300 - £350 per day: Orgtel: Financial Analyst, Forecasting, Halifax, Banking,...

Business Architect - Bristol - £500 per day

£500 per day: Orgtel: Business Architect - Banking - Bristol - £500 per day A...

Regulatory Reporting-MI-Bank-Cardiff-£300/day

£200 - £500 per day + competitive: Orgtel: I am currently working on a large p...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices