Lloyds Share News (LLOY)

The rash of banking results continues on Thursday with Lloyds Banking, and who better to comment on a part-nationalised fallen banking giant than RBS?"We expect Lloyds 1H11 [first half 2011] results to have relatively little impact on its share price as it presented a 2011 trading update as part of its 30 June strategic review presentation. The only potential surprise may [be] whether or not the positive net fair value unwind of £2.8bn, for which Lloyds is guiding, materialises during FY11-13," RBS saidCharles Stanley, meanwhile, forecasts adjusted profit before tax of £1,296m and earnings per share of 0.9p. Dividends remain but a fond memory for Lloyds shareholders. Nomura must be calculating its adjusted profit before tax figure a different way, because it has forecast an interim loss of £2.6bn, and a second quarter profit of £83.8m. It assumes revenue will be down 10% year-on-year (YOY), with expenses down 2%. "We assume a banking margin of 2.11%, compared with the full-year guidance of slightly above 2%. We estimate impairments of £5.0bn, down 24% y-o-y, with almost half in respect of Ireland. We expect UK mortgage and general corporate charges to increase, more than offset by lower personal unsecured and CRE [corporate real estate]," the Japanese broker said."We assume the process of shrinking non-core assets and wholesale funding will continue. We have modelled further associated write-downs in 2Q [second quarter]. However, the pace and cost of balance sheet restructuring in the more difficult 2Q conditions will be of interest to us," Nomura added.Elsewhere in the financial sector, insurance giants Aviva and RSA report. Charles Stanley is forecasting earnings per share (EPS) of 38.8p for the former and EPS of 6.3p for the latter. Interim dividends for the pair are forecast to be 9.5p and 3.12p, respectively.Panmure Gordon, meanwhile, forecasts interim operating profit using international financial reporting standards (IFRS) of £1,311m and an interim dividend of 10.2p for Aviva, and operating profit of £378m and an interim dividend of 3.31p for RSA.Anglo-Dutch household goods giant Unilever is set to update on second quarter organic sales growth and half-year profit numbers. "The company should accelerate in Q2 [second quarter] although will continue to record the slowest growth rate of the three food majors. In particular, European savoury was unusually disrupted by the impact of mild weather on soup sales in the opening quarter. We expect a significant recovery in European organic growth to 3.0% in Q2, having been negative by 2.7% in the previous three months," forecasts Matrix Group."We forecast 5.1% organic sales growth for Unilever in Q2 compared with market expectations of 5.5%, largely because of ongoing negative influences on demand in mature markets. However, we are more optimistic on EBIT [earnings before interest and tax] margins for H1 [first half] with expectations of 15.3% before RDIs [research, development and innovation costs] compared with 14.6% consensus," Matrix added.As for Panmure Gordon, it expects Unilever to show signs of life in the second quarter. "We expect it to show a material acceleration in sales growth from 4.3% in Q1 to 6.2% in Q2, as pricing strengthens, emerging markets remain strong and developed markets prove less of a drag than in Q1. While we also forecast a 50bp [half a percentage point] decline in clean EBITA [EBIT plus amortisation] margins, we believe that as things stand with respect to the economic outlook, raw material cost inflation and competitive pressure, Unilever will reiterate that it can recover this in H2. Price inflation of c3% in Q2, coupled with cost savings this year of nearly 3% of sales, should, we think, provide reassurance that it can defend margins in the face of 5.5% cost inflation."The broker predicts organic sales growth of 6.2% for the second quarter, which would be the fastest year-on-year growth recorded by Unilever since 2008. Charles Stanley weighs in with its forecasts for Unilever, gong for second-quarter revenue of €11.8bn, up from €11.75bn in the same quarter of last year. First half core EPS are tipped to dip to 65 cents from 68 cents, while the dividend is seen rising to 45 cents from 42 cents last year."We look for volume growth of around 2.7% and an improved pricing environment (c.+2.5%) but this against a very easy comparator quarter over Q2 2010. Despite strength from Rest of the World we expect Western European organic sales to be ahead, but only marginally so and pricing is likely to have proved tough as the company struggles to pass on higher input costs," Charles Stanley's Jeremy Batstone-Carr said. "Recent AC Nielsen data indicates, however, that we may be too cautious here and therefore we accept that the risks to our view are to the upside. The other key area of interest is likely to be group margin trends. H1 underlying operating margin is likely to be lower than the comparator half at around 14.5% (c.-40bps y/y). Again, we believe that Unilever has the capacity to beat our modest expectation based on its ability to hold A&P [advertising and promotional] spend steady as a percentage of sales," the broker added. The European Central Bank (ECB) and the Bank of England (BoE) are both expected to maintain the status quo on their interest rate policies on Wednesday, though in the case of the ECB there is the chance of a rate rise.ECB Governing Council member Christian Noyer was recently reported as saying that council members remain in "strong vigilance" mode, a phrase regarded as code for "a rate rise is coming". That sparked a prompt clarification from the Bank of France, which said that Noyer's words should have been translated as "strong alertness," a phrase which has no historical connotations as code for an imminent rise. Consequently, the code breakers seem to have no more idea whether a rate rise is imminent or not, but the very fact that the Bank of France acted to clarify things suggests that the ECB's key lending rate will remain at 1.50%.Predictions of what the Bank of England will do at its rate setting meeting are a lot more confident: "carry on and keep calm" is likely to be the order of the day, with the Bank's key lending rate staying at its historical low of 0.50% and the asset purchase programme staying wrapped in mothballs, though some economists have been urging the Bank's Monetary Policy Committee to launch QE2 (the second phase of quantitative easing) as a means of jump starting the UK economy.Barclays Capital notes, however, that while a resumption of QE got a mention in the BoE's minutes from June, it appears not to have been discussed at the July meeting. INTERIMSAviva, Catlin Group Ltd., Cobham, Coca-Cola HBC S.A., Hellenic Telecom Industries SA ADS, Inmarsat, Ladbrokes, Lloyds Banking Group, Motive Television, Novae Group, Randgold Resources Ltd., Rio Tinto, Robert Walters, RSA Insurance Group, Schroders, Schroders (Non-Voting), Spirent Communications, StatPro Group, UnileverINTERNATIONAL ECONOMIC ANNOUNCEMENTSPMI Construction (GER) (08:55)Factory Orders (GER) (11:00)ECB Interest Rate (EU) (12:45)Continuing Claims (US) (13:30)Initial Jobless Claims (US) (13:30)Bloomberg Consumer Confidence (US) (14:45)Q2Aviva, Hellenic Telecom Industries SA ADS, Inmarsat, Randgold Resources Ltd., UnileverANNUAL REPORTDart GroupAGMSBlue Planet Financials Growth & Income Inv Trust Unit, Blue Planet Financials Growth & Income Inv Trust Units, International Greetings, Invesco Income Growth Trust, Investec, Majestic Wine, Polar Cap Technology TrustUK ECONOMIC ANNOUNCEMENTSBoE Interest Rate Decision (12:00)New Car Registrations (09:30)FINAL DIVIDEND PAYMENT DATEBurberry Group, Dairy Crest Group, De La Rue, Dee Valley Group, Mckay SecuritiesINTERNATIONAL EARNINGSAdidas, CIGNA, Delta Lloyd, General Motors, Ing Groep, Kraft Foods, Tognum, Veolia Environnement --jh