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The week’s big news: banks, BP and more
The report card for the banks’ first quarter reporting season looks a mixed one at best.
On 25 April numbers from Barclays (BARC) came in short of expectations thanks to a weak showing from its investment banking division, with income down 11% and profit falling 29% to £846m.
This is expected to add grist to the mill for activist investor Edward Bramson who wants the company to downsize this part of the business.
Shareholders in Royal Bank of Scotland (RBS) faced the dual shock of the departure of chief executive Ross McEwan and a disappointing update for the first three months of the year (26 Apr).
The latter saw adjusted profit miss expectations amid a material quarter-on-quarter decline in its net interest margin – a key measure of a bank’s profitability. At 242p the company has surrendered a chunk of its year-to-date gains in response.
Emerging markets focused peer Standard Chartered (STAN) bucked this negative trend on 30 April. While it has a recent track record dogged by scandals and misconduct, its own first quarter statement showed signs it could be rehabilitated as profit beat consensus forecasts and the company announced a $1bn share buyback – its first in two decades. The shares are up nearly 20% since the start of April at 705.7p.
The first quarter of 2019 again saw BP (BP) beat expectations (30 Apr), repeating the trick it managed for every quarter of 2018. Profit actually fell on a quarterly and annual basis as the oil market started the year in a depressed state before recovering.
Advertising giant WPP’s (WPP) results for the first three months of the year reflected the loss of major US clients with sales down 2.8% but at least they were no worse than the market expected and year-to-date the shares are now 14% higher at 969p.