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Equity markets in London edged lower early trade on Friday, weighed down by disappointing results from RBS and IAG, although Pearson was a bright spot.
At 0845 GMT, the FTSE 100 was down 0.2% to 7,235.75, while the pound was up 0.2% against the dollar at 1.3977 and 0.3% firmer versus the euro at 1.1351. Stocks had been called to open lower after the main indices on Wall Street ended off their highs.
In corporate news, Royal Bank of Scotland was under the cosh even as it clambered back into the black in 2017 for the first time in a decade, as the taxpayer-owned bank took a hit in the fourth quarter from restructuring, litigation and conduct charges.
Spreadex analyst Connor Campbell said: “It seems that investors were put off by the lack of clarity surrounding RBS’ settlement with the US Department of Justice – which was meant to be sorted last year – with the bank still in line for a potentially colossal fine. In regards to that, RBS set aside another £492m, taking its total US litigation kitty to £3.2bn.”
British Airways owner International Consolidated Airlines Group was also weaker as its reported 19% jump in full-year operating profit fell short of analysts’ expectations.
Bookmaker William Hill fell after saying it swung to a £75m pre-tax loss in 2017 compared to a profit of £181m the year before.
On the bright side, educational publisher Pearson was higher after saying it swung to a full-year pre-tax profit of £421m from a £2.5bn loss the year before.
Standard Life Aberdeen rose after confirming the sale of its insurance arm to Phoenix for £3.2bn. Phoenix rallied on the news.
Life insurer Aviva was in the black after saying it has sold two more life and pensions joint ventures in Spain for £178m in cash, while Rightmove gained as it reported a 10% jump in full-year operating profit as revenue and customer numbers grew.
In broker note action, Barclays was reinstated at ‘buy’ at Cenkos Securities, while Lancashire was upgraded to ‘neutral’ at Credit Suisse.
Moneysupermarket was cut to ‘hold’ at Canaccord, BAE Systems was downgraded to ‘underweight’ at JPMorgan and Petrofac was cut to ‘underweight’ Morgan Stanley.
