Blue chip banking finale due on Friday with full-year numbers from Royal Bank of Scotland

By Jon Hopkins / February 22, 2018 / www.proactiveinvestors.co.uk / Article Link

The finale of a quartet of blue chip banking results this week, will see majority taxpayer-owned lender Royal Bank of Scotland Group PLC  release its full-year numbers on Friday.

After a decade of making losses, RBS is teetering on the brink of being back in the black, having posted profits of ?1.3bn for the first nine months of 2017.

However, analysts full-year estimates are pencilling in ?2.2bn of conduct charges in the fourth quarter, which is expected to push the state-owned lender into a loss of ?592mln, its tenth consecutive year in the red.

RBS has been guiding towards profitability in 2018, which suggests it is looking to book the lion's share of the fine in 2017, however, with the timing and size of the US DoJ fine still to be announced, RBS could actually break its duck and return to profit in 2017, with that fine pushed into the current year.

Standard Life Aberdeen fund performance seen as "challenging"

Staying with blue chip financial stocks, just over a week after Lloyds Banking Group PLC (LON:LLOY) and its Scottish Widows business decided to withdraw ?109bn of assets under management from the fund manager, Standard Life Aberdeen PLC (LON:SLA) will report full-year results on Friday.

In a preview, UBS analyst Colm Kelly highlighted "limited signs of stabilisation" in the merged group's fund management business and noted the "continued deterioration" of in flows in the fourth quarter coinciding with sustained outflows for emerging markets and Asia-Pacific equities.

"Fund performance has picked up YTD but remains challenged across core funds (lower percentiles vs benchmarks), providing limited confidence this could trigger a turnaround," the analyst said.

Investors betting on growth at William Hill

Numbers from William Hill plc (LON:WMH) are unlikely to surprise much, as the self-styled "home of betting" has already tipped off the market that trading in 2017 was ahead of expectations.

In a trading update in January, the bookmaker said its full-year adjusted profit is expected to be around ?290mln, up 11% or so on 2016.

William Hill also said it was conducting a strategic review of its business in Australia in view of the credit betting ban down under and the likely introduction of a point of consumption tax in a number of states.

Analysts will be keen to hear of any progress on this, though they may have to wait for the analysts' presentation for clues on which way management will jump.

Few surprises expected from Pearson

Under-pressure educational publisher Pearson plc (LON:PSON) already gave away the main points of both its full-year 2017 results and 2018 guidance with a trading update in January, so analysts at Liberum Capital do not expect much new from Friday's finals.

However, the analysts said, although there may be some incremental comments around cost savings and the US K-12 strategic review, they do think Pearson is likely to face a number of questions over the new "all you can eat offer" launched by rival, Cengage, which may raise concerns over UK firm's the 2018 performance.

Significant events expected on Friday February 23:

Finals: Royal Bank of Scotland Group PLC (LON:RBS), International Consolidated Airlines Group PLC (LON:IAG), Standard Life Aberdeen PLC (LON:SLA), Pearson PLC (LON:PSON), William Hill PLC (LON:WMH), Rightmove PLC (LON:RMV), Afarak Group PLC (LON:AFRK)

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