The Week Ahead: Results due from HSBC, Aviva, esure and TUI Travel

Insurance group Aviva reports half-year results on Thursday

Insurance group Aviva reports half-year results on Thursday - Credit: Archant

HSBC will round off the banking results season tomorrow before insurers including Aviva and Esure take their turn in the spotlight later in the week.

Emerging markets growth, the housing market recovery in the US and the UK and the improving global economy should help HSBC build on a 34% year-on-year rise in first-quarter underlying profits when it posts its half-year results.

HSBC, the last of the major UK high street banks to report on first-half trading, said first quarter profits rose to 7.6billiion US dollars (£4.9bn) from 5.7bn US dollars.

Falling charges for soured loans and compensation helped drive the profits rise, while chief executive Stuart Gulliver said the industry was moving into “calmer waters” in the wake of the credit crunch and the payment protection insurance mis-selling scandal.

Shore Capital analysts see HBSC reporting first-half pre-tax profits of 14.5bn US dollars (£9.6bn), up 14% from 12.7bn US dollars (£8.4bn) a year earlier.

Sheilas’ Wheels owner esure will update on how new gender equality rules are affecting the motor insurance market when it posts its maiden set of half-year results on Tuesday.

The group has been relatively unscathed by the introduction of rules banning cheaper car cover for women drivers, with many of its Sheilas’ Wheels customers choosing to stay with the group.

Most Read

As around 95% of its 700,000 Sheilas’ Wheels customers are women, the group did not have to shift prices for female drivers as dramatically as many rivals, raising prices by around 4% on average against increases of up to 20% elsewhere in the market.

Esure said gross written premiums were 3.4% higher across its core insurance brands in the first three months of 2013 and 3.1% ahead in its motor insurance brands.

However, analysts at Investec Securities believe Esure will struggle to maintain its female bias in the wake of the gender ruling and it expects its full-year pre-tax profits to shrink 12% to £101.7million.

Thomson and First Choice parent TUI Travel will reveal how the package holiday market has fared over the summer when it updates on trading on Wednesday.

The group, Europe’s biggest tour operator, said in May that summer sales were 13% ahead of last year as holidaymakers plotted getaways amid fears of another washout UK summer.

TUI is likely to face questions over whether its sales growth has been dented in more recent weeks by the heatwave, but Shore Capital analysts predict a similarly confident third quarter update.

TUI has already said it is on course to grow underlying profits by at least 10% over the full-year, after beating City expectations by cutting underlying operating losses 14% to £274m for the six months to the end of March which is typically a loss-making period for holiday firms.

Norwich-based Insurance giant Aviva will to deliver another blow to investors on Thursday by slashing its interim dividend, in line with the mammoth cut to its full-year pay-out earlier this year.

New boss Mark Wilson stunned the City in March when he cut the group’s divi by 44% following a long period of under-performance and a fall in underlying profits to £1.78bn in 2012, from £1.86bn a year earlier, and warned that the interim payout would suffer the same fate, which will be confirmed alongside the half-year results.

Analysts are expecting Aviva to post operating profits of £933m for the half year.

The group reported just over £1bn in operating profits for the first half of 2012, although this included earnings from its US life arm, which has since been sold.