Lloyds Banking Group and BP, two key British companies, are reporting earnings today as they emerge from crises that have dogged performance in recent years, according to Chief Investment Officer Haig Bathgate.
Underlying profits at Lloyds came in ahead of estimates, helping to justify the 90% increase in its shares in the past 12 months. While the bank set aside an additional £750 million to compensate those who were mis-sold payment protection insurance, provisioning for this issue is probably past its peak. Lloyds is also on course to increase its capital ratios through the possible sale of its Scottish Widows Investment Partnership business. Those capital levels are already improving due to the recovery of the housing market – aconsiderable portion of the bank's balance sheet is linked to property.
BP is still facing uncertainty over the ramifications of the oil spill in the Gulf of Mexico in 2010 and today said the incident would have a"net adverse impact" in the last quarter of $39 million. Still, profits came in ahead of expectations, which sent the shares higher in early trading.
Haig, speaking on BBC Radio's Good Morning Scotland, was speaking just before Lloyds and BP announced their results. He also commented on earnings at Apple and Wolfson Microelectronics.
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