Banks take centre stage with first-quarter figures

The part-nationalised lender, which updates on Friday, is expected to more than double first quarter losses to £957 million from £446 million a year earlier after seeing income slump in the wake of moves to sell off its Citizens business in the US and dramatically scale back its overseas and investment banking offering.

The City is predicting income to tumble by nearly a third to £2.9 billion, also reflecting the dearth of corporate deals, although it is less exposed than rival Barclays, with investment banking now accounting for only around 15% of the business.

Figures will also reveal the impact of its £1.2 billion payment last month to the Treasury to buy out a crucial part of its £45 billion bailout.

The payment ended a dividend access share (DAS) agreement with the Government that was put in place in 2009 and prevented it paying dividends to any shareholders before the Treasury.

First quarter figures come after a tough 2015 that saw the group rack up its eighth year in a row of annual losses.

The lender, which is still 73% owned by the taxpayer, posted annual losses of £2 billion in 2015, although this was down on the £3.5 billion reported a year earlier.

It also dealt a blow to long-suffering shareholders as it delayed the prospects of a dividend payout until at least after the first quarter of 2017.

This saw shares plunge on annual results day and the stock is still 28% lower than a year earlier, despite gains in recent weeks.

RBS also added to the jobs gloom in the sector earlier this month with plans to cut another 600 roles and close 32 branches, while reducing opening hours for hundreds more.

Barclays will reveal the impact of a dire start to the year in the investment banking sector on Wednesday while its bosses will face shareholders at the group's AGM a day later.

First quarter figures from the group follow a dismal clutch of earnings on Wall Street after the new year stock market turmoil caused a collapse in trading and fee income.

US giant Goldman Sachs most recently laid bare the extend of the sector's woes, revealing its first quarter profits had more than halved, down 56%, while net revenues slumped 40% to 6.3 billion US dollars (£4.3 billion).

Chairman and chief executive of Goldman Sachs, Lloyd Blankfein, said the first quarter had seen "headwinds across virtually every one of our businesses".

An update from Morgan Stanley the day before was equally grim, showing profits had more than halved, while results from JP Morgan, Citigroup and Bank of America Merrill Lynch have also revealed a hefty investment banking hit.

The Barclays results are expected to follow suit, although the group's retail arm will help offset some of the gloom.

The group's investment bank turned in a £146 million loss in the fourth quarter of 2015, which contributed to an 8% fall in annual pre-tax profits to £2.1 billion.

It has already warned over first quarter trading, saying alongside its annual results in March that figures are set be weaker than last year in the face of turbulent market conditions and a ''particularly strong March in 2015''.

But comparisons will be hard to make with last year, given that it will report figures for the ring-fenced businesses separately to the retail division for the first time.

Jes Staley, who replaced Antony Jenkins at the helm in December, announced a group-wide shake-up in March to split the bank into two divisions - Barclays UK and Barclays Corporate and International - and offload most of its stake in its Africa business.

The group's new boss is likely to face a rough ride at the annual general meeting on Thursday, which comes after shareholders have seen the stock slump by a third in the last six months, while dividend payouts will also be more than halved over the next two years.

Staff pay will no doubt also come under scrutiny once more.

Barclays awarded staff bonuses - including other incentives - of £1.7 billion for 2015, down from £1.9 billion the year before.

This included £976 million in bonuses across its investment banking business, down from £1 billion in 2014.

Thursday's update from Lloyds Banking Group is expected to see the group escape the profit hit suffered by its investment banking rivals.

Analysts at UBS are pencilling in first quarter underlying profits to fall to £1.9 billion from £2.1 billion a year earlier.

It is forecasting bottom-line profits to edge lower to £1 billion from £1.2 billion a year ago - described by UBS as "unremarkable" but "stable" given the woes in the investment banking sector, which will hurt rivals Barclays and Royal Bank of Scotland.

As with state-backed rival RBS, Lloyds has continued to shed jobs, with 625 roles being axed and some roles going offshore to India.

The latest cuts are part of 9,000 job losses announced by the bank in 2014.

Lloyds, which will face shareholders at its AGM in mid-May, said in February that full-year statutory pre-tax profits fell 7% to £1.64 billion in 2015 after taking another £2.1 billion hit for payment protection insurance (PPI) mis-selling.

Despite this, the group revealed an £8.5 million pay package for its boss and handed out a special dividend payment to shareholders.

Lloyds said the extra charge for PPI in the fourth quarter took its total for the scandal last year to £4 billion.

But it said stripping out PPI and other one-off costs, underlying profits rose 5% to £8.1 billion.

Taxpayers still own just under 9% of the bank and government plans to sell the remaining shares in February was postponed amid turmoil in the financial markets.

The Government will only sell the shares when the price rises above the 73.6p break-even level at which Lloyds was bailed out at the height of the financial crisis.