Lloyds Banking Group, HSBC PLC and Primark results to come after PM sets agenda

Monday evening’s speech from the prime minister on the plans for England’s emergence from the current coronavirus lockdown is definitely the big event of the coming week.

In the business world, the consequences are mainly for consumer-facing industries.

Banks, otherwise, are likely to remain uppermost in the financial news headlines in the coming week, with three of the FTSE 100’s big five reporting, with Primark owner AB Foods providing a peek at the high street and the government’s test and trace outsourcing provider Serco also chipping in with its own report.

Bank dividends may be overshadowed

On Tuesday, Holdings PLC () will take its turn, with peers Barclays and NatWest having led the way with the sector’s expected restart of dividend payments in the wake of the ’s Prudential Regulation Authority (PRA) lifting its ban but calling for prudence in payouts.

The dividend is likely to be overshadowed, however, by the Asia-focused lender’s promised strategy update, with chief executive Noel Quinn having pledged last autumn to accelerate the transformation of its US business and senior management having since reportedly come up with a plan to spin this arm off.

Additional restructuring for HSBC is expected to depress its profitability in the near term, said analysts at JPMorgan Cazenove in a recent note, though they see economic growth as likely to rebound faster in Asia and across EM versus the UK, meaning there could be “upside potential from loan growth and lower impairments”.

Fewer branches seems a likely future for the Hong Kong and Shanghai bank, it suggested last month as it announced the planned closure of over 80 UK branches was because customers prefer digital banking, especially in the wake of coronavirus.

From Europe’s biggest bank to the UK’s largest lender, PLC () will report on Wednesday, having returned to profit in its previous quarterly results and then promptly deciding to cut 1,070 more staff.

These final results will be the last under chief executive António Horta-Osório, who is stepping down at the end of April, as well as the first under new chairman Robin Budenberg, who started last month.

Analysts are forecasting the Spaniard will have to bow out with a rather meagre dividend of 1p a share, due to the PRA’s caution despite impairment charges against expected bad loans falling from £3.8bn in the first half dropping to £300mln in the third quarter.

As Lloyds’ incoming CEO Charlie Nunn, currently HSBC’s head of executive, wealth and personal banking, will not be joining in the summer, analysts at UBS expect “some uncertainty to remain over potential longer-term strategy beyond results”.

“But, with costs under good control and a low comparative base for revenues set in 2020 we think the firm has the potential to offer attractively valued gearing to a recovering UK post COVID 19”.

() on Thursday should be geared to the fast-recovering Asian markets, but like HSBC, is also expected to refresh its strategic targets.

In a recent note on emerging markets lenders, analysts at JPMorgan tipped StanChart to outperform HSBC in the coming months.

Although there is expected to be continued structural pressure from low rates, the number crunchers said near-term earnings for both bank should potentially benefit from lower bad debt provisioning as Asia drives the global recovery.

William Hill eyed for market read-across

() will report its final results on Wednesday, shortly after reporting that it returned to growth in the final quarter of 2020 thanks to strong performances from its sport betting business in the UK and US.

As the FTSE 250 bookmaker’s shareholders recently voted to approve a £2.9bn takeover by Caesars Entertainment Inc (NASDAQ:CZR), which is expected to complete in April or May, its numbers will really only be of interest to investors in its rivals such as ().

The US business will hold particular interest, given its strong…