UK banks earnings preview: where next for the Barclays, Lloyds and RBS share prices?

All three lenders are set to unveil their Q3 earnings next week and, with all stocks making gains after Boris Johnson agreed a new Brexit deal and could climb higher if results meet expectations.

Barclays, Lloyds and the Royal Bank of Scotland (RBS) saw their shares climb higher this week after the UK Prime Minister secured a new Brexit deal.

RBS benefitted most from the news, with its stock rallying more than % to 234p over the last five trading sessions, while Lloyds and Barclays climbed 5% higher, currently trading at 60p and 165p respectively.

All three lenders release their Q3 earnings next week and, with the prospect of Britain leaving with a deal on October 31, if the bank’s record a decent set of results their shares could climb even higher.

However, the UK banking environment remains challenging. British lenders are still contending with margin pressure in UK mortgages, increased regulatory scrutiny driving up the cost of compliance and low interest rates and a slowing of global economic activity hurting overall profitability.

Looking to trade UK banking stocks? Open a demo or live account with IG

PPI cloud still hovers over British banks

PPI threatens to spoil the banks Q3 earnings next week, with the scandal costing UK lenders billions in compensation claims already. Lloyds has suffered particularly hard, with the bank forced to pay out around £2.5 billion, forcing it to suspend its share buyback programme.

In a note to investors on Thursday, Deutsche Bank said that charges related to PPI will likely be a key focus for investors when UK banks unveil their latest set of figures.

The German investment bank also warned that it expects UK banks to see ‘further pressure’ on margins but added that they would find some relief from increased volume growth.

MPs ready to vote on Johnson’s Brexit deal

British lawmakers will vote on Boris Johnson’s new Brexit deal on Saturday. However, MPs will not have the chance to see the official impact assessment of the new deal prior to voting on it.

If MPs vote down the deal, Johnson will be forced to ask Brussels for yet another extension which will see the Brexit deadline pushed back to January 2020.

President of the EU Commission Jean-Claude Juncker said earlier this week that he wished to rule out any further delay to Brexit and block an extension, though EU member states declined to echo his sentiments.

German Chancellor Angela Merkel was quick to tell EU leaders that a Brexit extension is unavoidable if British lawmakers reject the deal in the House of Commons on Saturday.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.