TD Waterhouse customers banking on returns

Angus Rigby, Chief Executive Officer, TD Waterhouse comments: "Banks are once again the focus of TD Waterhouse customers' trading activities as the interim reporting season kicks off. First off the mark, with 10% of the top ten sells and 12% of the top ten buys, LloydsTSB announced its 2008 interim results yesterday. Contrary to recent market opinion that this is one of the ‘safer' banks at the moment, Lloyds reported pre-tax profits of £599m, down 70%, a demonstrable example of the impact that distressed and bad debt is having on the banking sector as a whole.

"Lloyds has been optimistic in the wake of this announcement, tempering concerns by also announcing underlying profits of £2.16bn, up 11% and a 2% increase in dividends to 11.4p. Analysts are mixed in their appraisal of Lloyds' strategy, with some suggesting that its focus on the UK market is too limiting, whilst others think that its comparatively low exposure to buy-to-let mortgages and asset-backed securities has proven a boon.

"Today it was the turn of HBOS, who reported a 72% fall in pre-tax profits to £848bn from £2.96bn in the same period last year. TD Waterhouse customers have been split on the bank all week ahead of the announcement, with the number of buys in HBOS only marginally out-weighing sells. HBOS is optimistic about the future thanks in part to its recent £4bn rights issue and as a result, shares in the bank rallied slightly this morning.

"In the coming weeks, Alliance & Leicester, who were recently demoted from the FTSE 100, announce their interim results tomorrow and HSBC make their announcement on Monday. Barclays, who this week take 15% and 20% of TD Waterhouse customer's top ten buys and sells respectively make their announcement on Monday, 7th August followed by our top trade, Royal Bank of Scotland, who announce on Friday, 8th August.

"Finally this week the airline industry is under examination, with British Airways featuring in both the buys and sells table. Recent surges in oil prices have taken the edge of off BA's record profits of last year and have only served to increase the woes of the industry as a whole. Whilst Ryanair has taken the riskier strategy of cutting prices in the face of rising costs to try and snag customers lost by other operators, BA continues to seek a merger with Spain's Iberia. The move which is backed by both boards would see the creation of Europe's third largest airline and both parties are confident of being granted regulatory approval, though a final agreement is some months away."