RBS bottom of the barrel in bumper bank results week

FTSE boost expected as banking giants unveil full-year profits

BRITAIN’S biggest banks will be firmly in the spotlight this week, with five of the major lenders reporting annual results.

Beleaguered Royal Bank of Scotland is expected to fare the worst of the giants, with the firm likely to report another round of job losses as it remains in the red for a ninth consecutive year.

The rest of the main lenders are expected to report solid profits, which could further boost the FTSE 100 this week.

RBS boss Ross McEwan is believed to be preparing more cost-cutting at the troubled bank, which could see him swing the axe on staffing levels once again. Analysts are expecting eye-watering annual losses of £6.1bn – one of the group’s biggest losses since its Government bailout in 2008.

The firm – which was already £2.5bn in the red for the first nine months of 2016 – recently revealed that it had set aside another £3.1bn for an expected fine from US authorities for mis- selling mortgagebacked bonds before the financial crisis, which will drag down fourth-quarter figures.

RBS has notched up losses of more than £50bn over the past eight years.

It has been a difficult year for RBS, which failed Bank of England stress tests and is struggling to find a buyer for 300 Williams & Glyn branches, which i t was ordered to sell by the European Union as punishment for its £45bn taxpayer-backed rescue.

Chancellor Philip Hammond has said the Government now does not expect to offload its 72pc stake until after 2020.

Meanwhile, fellow state-backed player Lloyds Banking Group, which reports on Wednesday, is expected to finally be free of its taxpayer support this year. The Government has already whittled down its stake to less than 5pc.

The group is expected to post pre-tax profits of £4.4bn, which will be a sharp rise on the £1.6bn it reported in 2015.

Lloyds has already announced another 3,000 job losses and a further £1bn was set aside in its thirdquarter figures for payment protection insurance (PPI) mis-selling.

But attention may focus on its pay and bonuses, which will be revealed alongside the figures.

The group is expected to hike its total bonus pool to around £390m from £354m for 2015. But boss Antonio Horta-Osorio is set to see his pay package shrink by around a third – from last year’s £8.5m to about £5.5m. His long-term bonus was hit when Lloyds shares tumbled after the Brexit vote.

Barclays chief executive Jes Staley will give an update on the plan he laid out a year ago to transform the bank, when it reports on Thursday. He has been selling non-core businesses to focus on US and UK operations.

Experts are predicting profits of £3.9bn, down from £4.5bn in 2015. The group put aside an extra £1bn for PPI in the last six months of 2016 alone, but its investment banking business has been boosted by the stock market rally since Donald Trump’s election victory in the US.

HSBC will report tomorrow. The bank announced in January it would shut a further 62 bank branches on top of the 55 closures announced last year, meaning a total of 117 HSBC branches will close in 2017. The group also revealed another 400 jobs are at risk as a result of the branch closures and IT efficiencies.

Analysts have forecast profits of around £10.7bn, down from £15.1bn in 2015. They will also be hoping to find out who will replace group chairman Douglas Flint.