Banks set for worst results in City history
Markets brace for a raft of bad news from HSBC, Royal Bank of Scotland and others
HSBC will today kick off another disappointing week of banking results as the credit crunch continues to wreak havoc in the City.
HSBC is forecast to reveal $2bn-$3bn (£1bn-£1.5bn) of credit market provisions in its global markets business. Europe’s biggest bank is likely to see a profits slump of 18 to 37 per cent, to between $8.95bn and $11.68bn.
Royal Bank of Scotland is expected to reveal a loss of £1bn on Friday, the biggest in British banking history, with £5.9bn of write downs related to the credit market set to push the bank £1.7bn into the red.
The results come amid calls for the resignations of chief executive Sir Fred Goodwin and chairman Sir Tom McKillop, just two months after RBS completed a record £12bn rights issue.
RBS will also announce an update on how the sale of its insurance business, RBSi, is progressing. American insurance group Allstate is thought to be the only remaining bidder.
Barclays, which recently made its own cash call worth £4.5bn, is also expected to have suffered significant impairment charges when it reports interim results on Thursday.
Some analysts are predicting a 35 per cent drop in profits, to £2.8bn, weighed down by £500m in new impairments on top of £1bn taken already this year.
Alliance & Leicester revealed on Friday that its profits had been all but erased by the credit crisis, down to £1.8m from £280m last year.