Barclays set for profit jump as banks begin reporting season

Barclays is first among the banks to present its annual results this week, as lenders hope to firmly put PPI behind them.

Analysts expect profit before tax to reach £6.048 billion at Barclays in the 2019 financial year when it reports on Thursday, up from £5.7bn a year before, according to consensus figures compiled by the bank. These figures do not include litigation and conduct items.

A day later new Royal Bank of Scotland boss Alison Rose will hope to deliver the £3.765bn operating profit in the 2019 financial year that analysts are forecasting, according to a company-provided consensus. It will be a rise from £3.359bn the year earlier.

The deadline for claiming money back for mis-sold PPI (payment protection insurance) passed in August, making this the last PPI-influenced set of annual results.

Investors will be keeping an eye on the results season to see what direction Britain’s biggest lenders are travelling in, analysts say.

“Back in late October the thirdquarter reporting season for the banks was largely forgettable, whereas these upcoming results will both summarise the direction of travel over the past year and,equally importantly, give some guidance on current and future prospects,” said Richard Hunter, head of markets at interactive investor.

Banks were given what could prove to be a temporary stay of execution last month when the Bank of England’s Monetary Policy Committee decided not to slash interest rates, as many had expected them to.

However, things may change when the rates come up for review.

Analysts will also keep an eye on indications that the market is picking up after December’s election, and more clarity on Brexit.

Investors certainly reacted with confidence after the election, sending Barclays’s shares up by 12% in the two sessions following the vote.

RBS saw a similar spike, as did Lloyds and HSBC, though all have given back some gains since.