This morning there was a £752m profit suprise from RBS – now a third the size it was pre-crash –though that figure could still be knocked back by US fines for mis-selling (more below). Asian stocks were rather cheerier today following yesterday’s retreat though their lead did not come from Wall Street last night with the Nasdaq finishing in the red.
Despite a rising yen the Japanese Nikkei surged +0.72% while the Hang Seng was up +1.0% with Country Garden Holdings and China Shenhua Energy up +4.8% and +3.5% respectively. The South Korean Kospi put on a +1.5% lift; over in Taiwan the Taiex climbed +1.24% with another chunky rise for Samsung.
On the Brexit front, Cabinet talks at Chequers, Theresa May’s country retreat, finished late last night. The word is that “Divergence has won the day”, according to the FT. Some improvement for the dollar index spot overnight, up +0.25% to 89.97 while the euro was down -0.26% to 1.2292. At a little after 7am sterling was -0.08% lower at 1.3935 against the dollar.
The power of celebrity did little for Snap yesterday. Reality TV star Kylie Jenner tweeted a measure of unsatisfaction with the messaging app, causing $1.3bn to be wiped off its value. “So does anyone else not open Snapchat anymore? Or is it just me..." Arriving shortly, German Q4 GDP numbers plus eurozone consumer price index at 10am.
- UK FTSE 100 7,252.39 -0.40%
- DAX 12,461.91 -0.07%
- CAC 40 5,309.23 +0.13%
- Euro Stoxx 600 380.34 -0.20%
- Dow 24,962.48 +0.66%
- S&P 500 2,703.96 +0.10%
- Nasdaq 7,210.09 -0.11%
- Nikkei 225 21,736.44 -1.07%
- Gold 1,329.20 -0.26%
- Oil WTI 62.80 +0.06%
RBS claims first profit in 10 years
RBS has announced a £752m profit after costs. This figure contrasts with a £7bn loss last year. For RBS it’s the first profit it can boast about for a decade but the publicly-owned enterprise is still in line for a hefty US mis-selling mortgage fine. There’s no agreed settlement; it could be as much as £2bn –or more.
Total revenues for 2017 landed at £13.1bn which compares with £12.6bn this time a year ago. Operating expenses were significantly lower at £10.4bn. RBS’ net interest margin – a key profitability indicator – was cut by five basis points to 2.13% compared with 2016.
“With many of our legacy issues behind us,” RBS chief exec Ross McEwan said, “the investment case for this bank is much clearer and the prospect of returning any excess capital to shareholders is getting closer.” However in the background lurks the contemptible treatment of many SMEs from RBS’s global restructuring group (GRG).
"We did not get it right for customers at the time when they needed us," McEwan told BBC Radio 4 earlier, "which was when businesses were struggling. They were the right businesses to be in there but we just didn't look after them well enough as we should have."
IAG profits climb 12%
This morning British Airways owner IAG reported a fourth quarter profit of €585m – a lift of more than 12% for the airline operator. Aer Lingus saw an operating profit of €269m compared to €36m last year. IAG pulls a full squad of other European brands behind it as well as flagship BA including Vueling and Iberia.
"Our confidence in IAG's future remains undaunted and today we're announcing our intention to undertake a share buyback," IAG chief exec Willie Walsh said. However airlines are facing rising oil prices not to mention pressure on staff salaries. IAG was hit by a major IT meltdown last year, hitting the airline with £75m extra costs.
Breaking news: Rightmove says revenues are up +11% to £243.3m in 2017 compared to £220m last year. Underlying operating profit is +11% higher at £184.4m