UK banking group Barclays (BARC) has reported a loss of £236m in its first quarter to the end of March as regulator fines again drag on performance.
Last month the bank agreed to pay $2bn to settle a lawsuit by the US government. Today's loss reflects that massive charge.
Stripping away those penalty effects, Barclays reported a slight increase in profits to £1.7bn, although much like its high street lending peer Lloyds (LLOY) yesterday, investors are proving difficult to impress.
Today’s news leaves Barclays share price down more than 2% at 207.95, making the stock one of the FTSE 100’s biggest losers on Thursday.
Insurance giant Legal & General (LGEN) heads the FTSE 100 loser board, its shares losing more than 4% at 267.1p, after going ex-dividend today.
But it is also worth noting the stock’s decent 5%-plus run so far in April. Legal & General will issue a first quarter update on 17 May.
Weak financial stocks leave the FTSE 100 index modestly in negative territory in early trade on Thursday, off around 0.14% at 7,368.
By contrast, investment business Old Mutual (OML) is the day’s biggest blue-chip riser, adding 1.5% to 252.1p.
ENERGY MERGER FACING EXTRA SCRUTINY
The planned merger of two of the UK’s big six energy suppliers, SSE (SSE) and Npower, will face further in-depth investigation by regulators. The UK’s Competition and Markets Authority (CMA) says the proposed merger ‘warrants further scrutiny’ after an initial investigation found that the deal ‘could lead to higher prices for some billpayers.’
This was not unexpected, as Shares pointed out some time ago.
The two companies have until 3 May to come up with measures that address the CMA concerns.
Investors have taken the news in their stride with shares in the SSE fractionally off in early trade on Thursday, down 3.5p at £13.34.
Oil giant Royal Dutch Shell (RDSB) reported a 42% rise in profits in the first quarter, measured as net income attributable to shareholders based on current cost of supplies. Coming in at $5.3bn, that’s the group’s highest in over three years, boosted by higher oil prices and production.
This is also better than analyst had predicted. Yet shares in Shell fall 2% to £25.355 in early deals, presumably as investors skim profits from the recent 15% run of the stock.
Staying in the sector, BP (BP.) is appointing energy industry veteran Helge Lund as its new chairman, replacing outgoing Carl-Henric Svanberg.
Mr Lund plans to stand down from his post as a director of US oilfield services company Schlumberger to take up the new role. Before Schlumberger, the Norwegian businessman was boss of Statoil and then the UK's BG Group before it was taken over by Shell.
DOMINO’S TAKES SLICE OF EASTER HOLS DEMAND
Britain’s biggest pizza delivery firm Domino’s Pizza (DOM) saw first quarter sales shoot up 18.3% as strong trading around New Year and Easter helped offset the impact of unusually colder weather.
Domino’s sales increased by 10.4% after stripping out the effects of new openings and currency oscillations, while UK like-for-like rose 7%. That’s encouraged investors to buy the stock, pushing the share price nearly 4% higher in early deals at 359.1p, valuing the business at £1.73bn.
Russian steelmaker Evraz (EVR) says on Thursday that its first quarter crude steel production fell by 9% year-on-year, to 3.4m tonnes.
The heavy industry supplier is blaming weather conditions for interrupting iron ore supply and issues at several blast furnaces for the decline, not trade hostilities emerging between China and the US.
Evraz shares stay largely flat at 419.8p, although it’s been a bumpy couple of month for shareholders, the stock storming ahead through February only to slump from 450p levels earlier in April.
FIRM GROWTH FOR INSURER HASTINGS
British insurer Hastings (HSTG) reported a 12% jump in first quarter net revenue, buoyed by an increase in the customer base and market share.
But investors remained concerned about competition its main motor insurance space, hence today’s rough 6.5% share price slump to 260.6p, the stock’s lowest level in a year.
Gold prices on Thursday were little changed after falling to their lowest in five weeks in the previous session, pressured by a stronger dollar and a rise in US Treasury yields.
Oil prices rose on Thursday, supported by an expectation that the US will re-impose sanctions against Iran, a decline in output in Venezuela and ongoing strong demand.
Several FTSE 100 firms go ex-dividend today, when investors lose the right to receive the next payout. That’s weighing on the share prices of miners Antofagasta (ANTO), Fresnillo (FRES) and Glencore (GLEN), and drags on the old Reed Elsevier media business Relx (REL). Ex-div stocks trim 7.44 points off the FTSE 100, according to Reuters’ calculations.
