European bank earnings will pour in next week, here's our look at what to expect from three of the big ones, UBS, Credit Suisse, and Barclays.
Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB) posted a loss this morning for the last three months of 2012. In the wake of that report, we take a look at some of the other big banks in the Eurozone, and mark what investors should expect from each of their upcoming earnings reports. The banks covered in this report are the big investment banks Credit Suisse Group AG (NYSE:CS), Barclays PLC (LON:BARC) (NYSE:BCS), and UBS AG (NYSE:UBS).
The big narrative in European investment banks for this quarter is the slew of one-off charges faced by the banks. Write downs, litigation costs, fines and other such charges are being felt across the board with many of the firms, including Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB), seeing once off losses because of these charges. Here’s what to expect from the other big players:
Credit Suisse AG (NYSE:CS): A Bank of America Corp (NYSE:BAC) report studying this bank expects earnings per share to come to 0.29 Swiss Franc (CHF) for the last three months of 2012. The report asserts that the Credit Suisse AG results will be cleanest of those offered by European investment banks, untainted by large one-off charges.
Revenues during this period are estimated to have been 5.9 billion CHF. During the last quarter of 2011 revenue came in at 4.5 billion CHF, while per share losses were 0.62 CHF. The important indicators for the investment bank in the report will be its progress toward implementing Basel III rules, and its progress in deleveraging itself.
The Swiss financial regulator has been pushing Credit Suisse Group AG (NYSE:CS) to deleverage itself. Its progress on that front may define its relationship with the regulator in the year to come. Credit Suisse is expected to report earnings on February 7th.
Barclays PLC (LON:BARC) (NYSE:BCS): The British investment bank is expected to make its fourth quarter earnings public on February 12th. Bank of America analysts are looking not at the earnings report, which they cast off as a “sideshow,” but instead at the outcome of Barclays plc trategic review.
Aside from that, the analysts are expecting the company to post full year earnings of £7.2 billion from the bank for 2012. Profit in the fourth quarter is expected to come in at around £1 billion. Revenues are expected to be have been just below £6.9 billion for the period. In the same period in 2011, Barclays PLC (LON:BARC) (NYSE:BCS) brought in a profit of £819 million, with revenues totaling £6.3 billion in the period.
The key indicators in the company’s report will be the company’s level of bad debt, which the BAC analysts expect to have increased in the quarter. The company’s cost reduction plan will also be in the spotlight. Analysts expect costs to come in a little high because the company faces a levy of £350 million in the period. The number being looked for is around £4.6 billion.
UBS AG (NYSE:UBS): February 5th will see UBS report its earnings for the last three months of 2012. Bank of America Corp (NYSE:BAC) analysts are expecting to see per share losses of 0.47 CHF. Revenues for the period are expected to come in at 6.7 billion CHF. In the same three months of 2011, UBS AG (NYSE:UBS) earned 0.08 CHF per share on revenues of 6.3 billion CHF.
UBS AG has already announced that it lost between 2 and 2.5 billion CHF in the last three months of 2012. The company is expected to have hit the Basel III capital ratio in the quarter. That means it is in a prime position to grow in 2013. The company is, however, in the middle of a period of downsizing and restructuring that may nullify any advantages.
In the conference call that will follow the release of the earnings report, the analysts from Bank of America Corp (NYSE:BAC) have said that they will be concentrating on news about UBS AG (NYSE:UBS) cost cutting initiatives. The analysts wish to know whether the bank is looking to slow down or speed up the cutting of its investment banking unit, and their deleveraging attempts.