Barclays (BARC) – Reports 22/02

Barclays shares fell 2.6% when they reported full year results in February 2017, with a near tripling of profits not enough to offset concerns about rising costs and impairments at its investment bank. Furthermore, the bank agreed to pay £790m to its African division in order to fund its move away from the parent company.

The negative investor reaction was repeated following Q1 results in April, this time even more pronounced as shares dived 5.1%. The sell-off came despite management announcing a more than doubling in pre-tax profits from continuing operations as underperformance in its trading division compared with US rivals weighed.

It was a similar story after Q2 results, with shares dipping 1.7% after the bank announced a £1.4bn loss. The bank missed analysts’ expectations as group revenues fell 15%, while UK profits were hit by a £700m PPI provision. But the worst was saved for last as shares fell 7.4% in reaction to Q3 results in October. Once again, a poor trading performance was to blame, as a 34% drop in revenues overshadowed a 40% jump in quarterly profits.

A year ago, Barclays shares began a 9-month downtrend after FY results. It would have been possible to maximise potential returns from a short trade using a CFD, which allows traders to profit from falling markets. If you had opened a £10,000 short position at 240p in February 2017 using a £500 deposit, closing the trade near 2017 lows of 180p, you could have turned a profit of £2,500 before commission and overnight financing costs. Note, should shares have rallied by the same amount, you would have incurred losses of an equal magnitude.

Royal Bank of Scotland (RBS) – Reports 23/02

On 24 February 2017, RBS shares fell 4.5% after the bank announced a £7bn loss. A trebling of the figure given just two years earlier and its ninth consecutive annual loss, it brought total losses over 9 years to £58bn. The bank’s CEO announced a plan to cut costs by £2bn and pledged to stay with the company until it was in profit.

Since those full year figures were announced, however, the bank has released a string of well-received results.

Most notably, Q1 results in April were met with a 4.7% share price rally as the bank reported a first quarter profit, its first since Q3 of 2015. RBS then followed this with a 2% rally after reporting a first half profit in August, while Q3 results in October resulted in a further 1.7% rally as the bank announced a third successive quarter of profits. Investors will now be asking if full-year results can see a repeat performance of the preceding quarters?

A year ago, it would have been possible to trade RBS shares using a CFD to maximise the potential return from the post-results recovery. By opening a £10,000 long position with a £500 deposit at 240p, a price traded on the day of results, and closed the trade at a price of 280p eight months later, you would stand to make over £1650, before factoring in commission and overnight financing costs. Note, should shares have fallen by the same amount, you would incur losses of a reciprocal magnitude.

Over the page, we preview what each of these banks full year results will be influenced by, as well as detailing any potential announcements that will drive the share price on the day. Will your bank of choice announce favourable results?