Barclays and Lloyds results due
A busy week for results will see two of Britain's under-pressure banks post figures.Banking giant Barclays, which presents its half-year results on Friday, has endured one of the most turbulent periods in its history after it was fined £290 million by UK and US regulators for manipulating Libor, an interbank lending rate that affects mortgages and loans.
The affair led to the departure of chief executive Bob Diamond, triggered a fierce debate in Westminster over banking ethics and has spawned several closely-watched hearings before the Treasury Select Committee.
Marcus Agius, who will resign once a successor for Mr Diamond is found, will present the group's interim results in his temporary role as executive chairman. He will hope the figures, which are forecast to show a 10% rise in underlying profits, to £4.1 billion, will go some way towards appeasing investors, who have seen the share price plunge 20% since the scandal broke.
The higher profits, which will be driven by a stronger performance from its investment arm Barclays Capital, could ease concerns held by credit ratings agencies Moody's and Standard & Poor's, which both placed Barclays on negative outlook. The robust results may also address fears over the bank's weak record on return on equity, a major issue for shareholders at its annual meeting.
Meanwhile, taxpayer-backed Lloyds Banking Group, which unveils its half-year results on Thursday, reached a major milestone when it finally agreed the sale of 632 branches to the Co-operative Group for up to £750 million.
While the 40% state-owned bank admitted it would make a loss on the sale, some commentators said the deal was a crucial step in Lloyds' recovery. With the so-called Project Verde disposal sealed, subject to regulatory and Government approval, focus will now return to Lloyds' financial performance and turnaround plan.
Lloyds may face questions about its involvement in the Libor-fixing scandal, which has so far been heavily focused on Barclays, the only bank to be fined for manipulating the key interbank lending rate. Lloyds has previously admitted to "assisting the regulators" with their Libor investigations but would not comment further.
If the Financial Services Authority uncovers evidence of rate-rigging, the bank could face a multi-million pound fine, possible compensation claims and reputational damage.
Chief executive Antonio Horta-Osorio has previously warned the bank faces a tough 2012, with income-related targets set to be delayed as a result of the weaker-than expected economic outlook. But despite the difficult climate the bank is set to reveal broadly flat underlying pre-tax profits of £1 billion for the first six months of the year.
Meanwhile, taxpayer-backed Lloyds Banking Group, which unveils its half-year results on Thursday, reached a major milestone when it finally agreed the sale of 632 branches to the Co-operative Group for up to £750 million.
While the 40% state-owned bank admitted it would make a loss on the sale, some commentators said the deal was a crucial step in Lloyds' recovery. With the so-called Project Verde disposal sealed, subject to regulatory and Government approval, focus will now return to Lloyds' financial performance and turnaround plan.
Lloyds may face questions about its involvement in the Libor-fixing scandal, which has so far been heavily focused on Barclays, the only bank to be fined for manipulating the key interbank lending rate. Lloyds has previously admitted to "assisting the regulators" with their Libor investigations but would not comment further.
If the Financial Services Authority uncovers evidence of rate-rigging, the bank could face a multi-million pound fine, possible compensation claims and reputational damage.
Chief executive Antonio Horta-Osorio has previously warned the bank faces a tough 2012, with income-related targets set to be delayed as a result of the weaker-than expected economic outlook. But despite the difficult climate the bank is set to reveal broadly flat underlying pre-tax profits of £1 billion for the first six months of the year.
© 2013 Press Association