Banks slip after shock Pounds 989m deficit ; YESTERDAY IN THE CITY [Western Morning News (England)]
(Western Morning News (England) Via Acquire Media NewsEdge) Blue-chip banking shares have fallen after big losses reported by Deutsche Bank clouded the outlook for their results next month.
Shares in Barclays were 2% lower after Germany's biggest lender posted a fourth quarter deficit of 1.2 billion euros (Pounds 989m) reflecting a 16% fall in revenues as well as one-off expenses and losses on disposals. The FTSE 100 Index was 7.4 points higher at 6836.7, with trading in Europe quiet due to US markets being closed for Martin Luther King Day.
The major news of the session came from Deutsche Bank, which brought forward its full-year figures from January 29 after they came in below market expectations.
Its 31% year-on-year drop in revenues from fixed income, commodity and currency trading (FICC) follows disappointing updates in this area from the large US investment banks. Barclays was down 5.8p to 282.8p and Royal Bank of Scotland slipped 4.7p to 359p on the back of the Deutsche Bank update. HSBC was off 4.7p to 673p while Lloyds fell 0.3p to 83.2p.
Gary Greenwood, a banking analyst at Shore Capital stockbrokers, noted that FICC is likely to have accounted for approximately 20% and 15% of total group income at Barclays and RBS respectively last year. Elsewhere in the FTSE 100, Royal Dutch Shell came under fresh pressure following its profits warning on Friday but by the close the stock had recovered slightly, up 1p to 2280.5p, after a fall of 1% over the previous session.
BT shares were also squeezed after the Sunday Times reported that Vodafone and satellite broadcaster BSkyB had explored ways to strengthen themselves against the telecoms firm.
It said the two companies discussed deals on Sky's sports and movie channels as well as collaborating on a high-speed broadband service. BT's shares were 3.9p lower at 379.5p and Vodafone dropped 0.05p to 239.95p.
BSkyB, which is due to release results next week, was 14p higher at 854p.
6836.7 The FTSE 100 Index at the close was 7.4 points higher
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