First quarter profits rise at Lloyds Bank, hygiene brands drive growth at Reckitt

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The FTSE 100 is expected to open 27 points higher on Wednesday, having closed down 0.26% on Tuesday at 6,944.97.

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Lloyds Bank reported a large year-on-year increase in first quarter profits reflecting improved economic outlook as the Covid-19 vaccine rollout gathered pace. The bank said pre-tax profits came in at £1.9bn compared with £74m a year ago as Britain went into lockdown. It reported a net impairment credit of £323m in the quarter, driven by a £459mn release given the UK's improved economic outlook. Looking ahead, Lloyds said it expected a net interest margin of 245 basis points for 2021.

Reckitt reported group like-for-like net revenue growth of 4.1% to £3.51bn in its first quarter on Wednesday, with like-for-like growth in its hygiene division standing at 28.5%. The FTSE 100 consumer products giant said its health operations saw a like-for-like decline of 13%, meanwhile, as its nutrition unit turned in a like-for-like decline of 7.4%. It left its outlook for 2021 unchanged, with the board saying the company remained on track with its medium-term goals.

London Stock Exchange said it had a good first quarter as it reported a 4% increase in its favoured profit measure driven by growth in data and analytics and capital markets transactions. Gross profit excluding currency fluctuations and a deferred revenue adjustment rose 4% to £1.54bn in the three months to the end of March from a year earlier as total income excluding recoveries rose 3.9% to £1.68bn. Reported gross profit fell 0.5% and reported income fell 1.2%, held back partly by the dollar's decline against sterling. All the figures exclude the acquisition of Refinitiv in January.

Newspaper round-up

A scheme set up to provide compensation to victims of banking scandals has cost more than £23 million to establish, but is yet to issue a penny in redress to small business owners. The Business Banking Resolution Service, formed in 2019 after calls for small business lending to be regulated were rejected, has run up an “eye watering” bill for staff and third-party advisers, adding to pressure on it to start delivering compensation. - The Times

Motorists could legally allow their cars to “self-drive” on British motorways later this year – but only slowly, the government has announced. Drivers could soon be allowed to read a newspaper or watch a film via the car’s built-in screen in periods of slow-moving traffic, using automated lane-keeping system (Alks) technology that makes the car stay in lane and a safe distance from other vehicles. - Guardian

A French state-backed satellite company has allied itself with Britain against Elon Musk’s SpaceX by taking a stake in the space internet company OneWeb. Eutelsat is paying $550m (£395m) for a 24pc stake in OneWeb, which was rescued by the UK last year in a joint venture with Indian telecoms giant Bharti. - Telegraph

Profits at Alphabet more than doubled after companies splashed out on digital advertising to reach people working and playing online during the pandemic. The owner of Google and YouTube said that it had been boosted by “elevated consumer activity online” as it again beat Wall Street’s expectations. - The Times

Bank losses linked to the collapse of Archegos Capital Management have topped $10bn, after Nomura and UBS became the latest global banks to reveal the true impact of the hedge fund’s failure on their finances. Some of the world’s largest investment banks have been left nursing billions of pounds worth of losses as a result of their exposure to Archegos, the personal hedge fund of the New York-based billionaire Bill Hwang. - Guardian

US close

Wall Street stocks turned a mixed performance on Tuesday ahead of a big batch of tech earnings after the close.

At the close, the Dow Jones Industrial Average was up 0.01% at 33,984.93, while the S&P 500 was 0.02% weaker at 4,186.72 and the Nasdaq Composite saw out the session 0.34% softer at 14,090.22.

The Dow closed just 3.36 points higher on Tuesday.

Tesla shares were in the red despite the electric carmaker posting record quarterly net incomes of $438.0m, while UPS shares soared after smashing Wall Street estimates with first-quarter revenue growth of 27%.

Alphabet posted a first-quarter profit twice as high as the same time a year earlier, driven by a surge in Google ad sales, while Microsoft reported a surge in sales amid demand for cloud services and PCs amid the Covid-19 pandemic.