Schroders Profit Falls, RBS Loss

123jump.com Staff
08 Aug, 2008
New York City

Stocks in London rose fractionally after a steady decline in crude oil prices lifted airlines, retailers and transportations companies. However, miners fell after commodities prices declined. Of the 102 FTSE 100 stocks 72 rose, and 30 declined. British Airways led advancers in the index shares with a rise of 8.14% after crude oil prices for September delivery plunged 3.3% to $116.10 a barrel. Schroder profit fell 28% and RBS reported its first quarterly loss in four decades.

[R]3:00PM New York, 9:00PM London – A fall in crude oil prices lifted transportation and consumer related stocks for the second week in a row. RBS is expected to eliminate 2,000 jobs after it reported its first quarterly loss. Schroders rose after it reported 28% fall in profit.[/R]

Stocks in London rose fractionally after a steady decline in crude oil prices lifted airlines, retailers and transportations companies. However, miners fell after commodities prices declined.

Market Sentiment

In London trading FTSE 100 rose 0.21% or 11.7 to 5,489.20.

Of the 102 FTSE 100 stocks 72 rose, and 30 declined. British Airways led advancers in the index shares with a rise of 8.14% after crude oil prices for September delivery plunged 3.3% to $116.10 a barrel.

RBS Lost £761 million in H1

Royal Bank of Scotland reported first half pre-tax loss of £691 million on £5.9 billion write down in assets. The loss, first ever in the last forty years on a sharp write down in the asset may help the troubled bank in averting asset sale at a discount price. Tier 1 capital ratio at the end of the first half of 8.6%. The loss attributable to shareholders was £761 million compared to £3.6 billion a year ago.

Operating revenue declined to £16.8 billion from £17 billion and the bank reported a net loss of £691 million compared to a profit of £5.115 billion. Losses per share in the period were 4.7 cents compared to earnings of 22.8 cents per share.

In order to boost capital the lender managed to raise £12.3 billion in June and Core Tier 1 capital increased 5.7% as of June 30 from 4.5% at the end of the year. RBS is going to eliminate 2,000 jobs as it integrates ABN AMRO business.

In the UK Retail & Commercial Banking division, personal savings increased 12% and mortgage balances advanced 10%. In Asia, deposits increased by 34%.

Profit at the U.S. banking unit however dropped 32% to £534 million as bad-loan provisions increased. But, commercial lending increased by 13%.

Schroders Profit Declines 28%

U.K. proprietary fund manager revenue in the first half fell to £542 million from £558 million and profit after tax fell to £100 million from £140 million in the period a year ago. Diluted earnings per share declined to 35.8 pence from 49 pence a year ago.

The funds under management saw net outflows of £0.2 billion compared to net inflows of £3.6 billion a year ago period.

Significant outflows in continental Europe were largely offset by continuing inflows in Asia Pacific, the UK and the Americas. Retail funds under management at the end of June were £51.2 billion compared to £56.2 billion.

Gainers & Losers

British Airways led advancers in the FTSE 100 index shares with a rise of 8.14% followed by increases in Thomas Cook of 7.72%, in TUI Travel of 7.71%, in Schroders of 6.36%, and Wolseley of 6.32%.

British Airways rose after crude oil prices for September delivery dropped 3.3% to $116.10 a barrel. TUI Travel and Thomas Cook rose on a fall in crude oil prices.

Royal Bank of Scotland’s loss of £761 million was also below what the market had expected. The stock gained 3.22%.

Retailers advanced. Sainsbury edged up 5.57%, Next surged 4.96%, and Kingfisher rallied 3.89%.

Kazakhmys led decliners in the FTSE 100 index shares with a loss of 6.45% followed by losses in Ferrexpo Plc of 5.71%, in Vedanta Resources of 4.90%, in Xstrata of 4.90%, and Antofagasta of 4.85%.

Commodity stocks declined after copper prices plunged 2.8% to $7,450 a metric ton and crude oil fell 3.3%. Tullow Oil slipped 4.72%, Anglo America slumped 2.82% and Rio Tinto tumbled 2.62%.

Europe Markets Review

In London FTSE 100 Index closed higher 11.70 or 0.21% to 5,489.20, in Paris CAC 40 Index increased 34.42 or 0.77% to close at 4,491.85 and in Frankfurt DAX index higher 18.16 or 0.28% to close at 6,561.65. In Zurich trading SMI increased 80.03 or 1.11% to close at 7,262.10.

CAC 40 Index

ArcelorMittal led the decliners in the CAC 40 index with a loss of 4.24% to $2.41 followed by losses in Credit Agricole of 2.69% to $14.46, in BNP Paribas of 2.63% to $62.965, in EDF of 2.54% to $55.29 and in Vallourec of 2.50% to $184.84.

EADS led the gainers in the CAC 40 index with a rise of 7.73% to $14.63 followed by increases in Essilor International of 3.52% to $34.11, in Sanofi-Aventis of 3.05% to $47.96, in Air France-KLM of 2.81% to $17.93 and in Bouygues of 2.52% to $44.00.

DAX Index

Of the 30 stocks in the DAX Industrial Average 14 stocks gained and 16 declined.

Deutsche Boerse led the decliners in the DAX Industrial Average with a loss of 2.88% or $2.03 to $68.37 followed by losses in E.ON AG of 2.60% or $1.05 to $39.30, in Deutsche Postbank of 2.00% or $0.87 to $42.66, in Bayer AG of 1.97% or $1.10 to $54.61 and in Muenchener of 1.86% or $2.07 to $109.11.

BMW led the gainers in the DAX Industrial Average index with a rise of 5.69% or $1.58 to $29.25 followed by increases in Daimler AG of 4.12% or $1.66 to $41.80, in Infineon Tech of 4.08% or $0.22 to $5.74, in Henkel AG of 3.96% or $1.07 to $28.08 and in Metro AG of 1.48% or $0.58 to $39.75.