Big profits due from banks and oil companies – Daily Business

RBS owner NatWest will report big profits

While the Budget will dominate this week’s agenda, two of the sectors most likely to be impacted by it – banking and energy – will also be in the headlines for delivering big profits.

Lloyds Banking Group posts a third-quarter update on Thursday followed by NatWest-RBS on Friday, giving both an opportunity to flesh out their immediate responses to any new bank taxes announced by the Chancellor on Wednesday.

Both will be able to quantify its impact on earnings alongside their numbers. Lloyds CEO Charlie Nunn has told investors that it can withstand a rise in the bank surcharge, which is levied at 3% on top of corporation tax.

Increasing the surcharge to 8% is expected to land Lloyds and NatWest with a £750m combined increase in their annual tax bills.

Mr Nunn will also be expected to demonstrate the continuing benefits of its push into areas such as wealth management to reduce its reliance on interest rate movements.

Analysts at AJ Bell say there will also be a focus on bad debts as UK households contend with rising prices and borrowing costs.

Expectations are that Lloyds is on track for record pre-tax profits for 2026 of £8.8bn and NatWest £8.5bn, the highest since the financial crisis when it was known as Royal Bank of Scotland.

While the banks will report big profits, so too will BP and Shell which may count against their chances of seeing any reduction or early change in the energy profits levy, or windfall tax.

Shell is expected to have almost doubled its third-quarter profits to $10.3bn, while BP could more than treble its profits to $7.3bn in the same period, analysts forecast. 

AJ Bell notes that BP’s share price recently reached its highest level since the Deepwater Horizon oil spill in 2010. Recently appointed CEO Meg O’Neill has proved to be a lucky general as the spike in energy prices has helped bolster profit and pay down debt.

Investors will be monitoring the results for news of further write-downs for its green energy assets as well as signs the business is making the necessary improvements to ensure robust profitability and cash flow is not just a temporary windfall from supportive oil and gas markets.

Ms O’Neill may also be expected to tease a big strategy update in December which will be expected to address how BP pivots from recovery to growth.

DIARY

Tuesday 27 October

Wednesday 28 October

Trading updates from GSK and Unilever

Interim figures from C&C Group, owner of Tennents and Innis & Gunn

UK Budget and Office for Budget Responsibility economic and fiscal forecasts

Thursday 29 October

Trading updates from Shell and Lloyds Banking Group

UK mortgage approvals and consumer credit for September

European Central Bank interest rate decision

Friday 30 October

Trading updates from BP and NatWest

#Big #profits #due #banks #oil #companies #Daily #Business