What dates do the UK Banks report their Q3 results?
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Wednesday 25 October – Lloyds
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Friday 27 October – RBS
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Thursday 26 October – Barclays
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Monday 30 October– HSBC |
How did investors react to the UK Banks’ Q2 results?
For the second time in 2017, Lloyds kicked off the UK banks’ earnings season. On 27 July, the bank reported half-year underlying profits increased by 11%, however also announced the allocation of a further £1bn to cover insurance mis-selling claims, most notably PPI provisions (£700m). Unsurprisingly, yet more PPI provisions were not well received by investors, with the company’s share price falling 2.3% on the day of the results. Barclays followed suit the very next day, also announcing further PPI provisions of £700m while announcing a £1.4bn attributable loss due to the disposal of its Africa unit. While investors weren’t too impressed by the figures, with the share price falling 1.7% on the day, this was significantly better than the 5% sell-off after Q1 results.
HSBC was the first of the big four UK banks to receive a positive reaction from investors to Q2 results, rallying 1.8% on 31 July. The Asia-focused lender announced a share buyback scheme worth $2bn as it beat estimates across the board, prompting the understandably positive reaction. RBS rounded things off on 4 August, reporting a half year profit for the first time since 2014, with shares rally by 2% after the announcement.
How have UK Banks’ US counterparts fared so far?
US banks endured a torrid second quarter, suffering due to poor numbers for crucial fixed income, currencies and commodities (FICC) trading departments due to low volatility, however third quarter results have been focused on loan growth figures as the US Federal Reserve continues to raise interest rates.
JP Morgan, continuing the trend from the first half of the year, crossed the wires first on 12 October, reporting a beat on both the top (revenue) and bottom (earnings-per-share) lines. Citigroup followed a few hours later, also announcing both a top and bottom line beat, although. However, investors were far from impressed by this first round of results, as concerns about loan growth saw both banks’ share prices fall; the former by 0.9% while the latter shed 3.4%. On Friday 13 October, Wells Fargo reported a $1bn legal bill as a result of 2016’s accounting scandal, denting both top and bottom lines and seeing shares open over 3% lower, while Bank of America Merrill Lynch opened 1% higher after announcing FICC trading in line with expectations and a bottom line beat.
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