Britain's four major lenders will publish earnings this week, with investors now focused on potential downside surprises following a a show-stopping disappointment from HSBC's (HSBC) - Get HSBC Holdings PLC Sponsored ADR Report full-year report Tuesday.
Next up are Lloyds (LYG) - Get Lloyds Banking Group plc Sponsored ADR Report , Barclays (BCS) - Get Barclays PLC Sponsored ADR Report and Royal Bank of Scotland (RBS) - Get Royal Bank of Scotland Group plc Sponsored ADR Report , which are also due to report over the next three days. Nearly half of all European banks reporting have beaten expectations for earnings for far this season, while two thirds have beaten estimates for sales - according to data produced by analysts at Barclays.
Mortgage backed securities, M&A and restructuring will all be key focus points for investors, who face another year of record breaking charges relating to past misconduct. But the forthcoming results could also mark an inflection point in post-crisis history that might see some lenders finally able to move on from the past.
First up Wednesday is Lloyds - the most domestic of all large U.K. lenders. It is expected to report revenue of £8.91 billion ($11.1 billion) for the second half of the year and £17.47 billion for the whole of 2016. Adjusted earnings per share are seen at 4 pence and 7 pence for the interim and full year periods respectively.
Quite apart from an update on post-referendum trading, investors will be looking for closely at management guidance for regulatory capital after the British bank agreed to splash out £1.9 billion in December to acquire Bank of America's (BAC) - Get Bank of America Corp Report U.K. credit card business - MBNA.
In addition, future capital allocation and M&A policy will likely be a key concern after the lender's inaugural post-crisis deal in December - which took some investors by surprise.
The shares were little-changed Tuesday at 67.42 pence, but are up by 8.3% for the year-to-date.
Barclays, London's homegrown powerhouse for bonds, currencies and commodities trading, is expected to report on Thursday. The consensus is for total revenue of £10.53 billion for the half year and £21.19 billion for the full year. Adjusted earnings per share are seen at 6 pence and 12 pence respectively for both periods.
Investors will also look for further updates on the run down of non core assets, given that CEO Jes Staley has said he intends to close the non-core unit in 2017.
Investors will also be keen to hear further details on litigation in the U.S given that the lender has broken ranks with its counterparts and decided to fight the DoJ in court on charges relating to the sale of mortgage backed securities in the U.S.
Deutsche Bank (DB) - Get Deutsche Bank AG Report and Credit Suisse (CS) - Get Credit Suisse Group AG Sponsored ADR Report settled with the DoJ in December for $7.1 billion and $5.3 billion respectively.
Barclays traded 0.80% lower on Tuesday, at 236.4 pence, although it has gained 6.4% for the year-to-date.
Last, but by no means least, is RBS, briefly the world's largest bank but now a hospital case still recuperating in the arms of the British government.
Revenues for the full year are seen at £11.94 billion. However, the lender is forecast to report a pretax loss of just over £2 billion and an adjusted loss of 6 pence per share.
RBS has successfully brought about a positive shift in investor sentiment toward its stock so far in 2017.
It said in January that it has put by £3.1 billion ($3.8 billion) in provisions for an expected settlement relating to the sale of mortgage backed securities in the U.S., taking total provisions for the issue to £6.7 billion.
It is likely to face the largest settlement to date for mortgage backed securities fraud given its position as the largest surviving underwriter or MBS in the U.S.
The bank gave investors another reason to cheer on Monday when it said it will abandon the sale of 341 retail branches, mandated by the European Commission, and that it is considering an alternative plan for the repayment of state aid granted to it during the financial crisis.
The shares traded 1.6% lower on Tuesday, to 255 pence, although they are up by 14.2% for the year-to-date. Monday's announcement saw the stock recover all of its post-referendum losses.