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Having helped lead the way yesterday, Banks are today’s index millstone after disappointing Q4/FY results from heavyweight HSBC (-6.1%) spooked investors in sector peers ahead of report cards this week expected to show profits progress for Lloyds and Barclays to keep their shares in post-Brexit uptrends, but RBS still struggling with legacy issues.
Profits for banking behemoth HSBC, however, fell a whopping 62%, and although the full year dividend was held, some are disappointed with the scale of the share buyback programme. While its woes appear confined to one-off cost saving charges and write-offs related to its Private Bank, fellow Asia-exposed Standard Chartered (-1.5%) is being tarred with the same brush while international and investment banking focused Barclays (-0.7%) fares better alongside RBS (-0.6%).
Today’s winner is Lloyds (+0.1%) which is outperforming thanks to insulation from a post-Bailout UK focus. Note all off their worst levels and don’t forget HSBC goes ex-div for circa 16.9p on Thursday, meaning another hit to its shares and another 11pts off the index.
Mike van Dulken, Head of Research, 21 Feb
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
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