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What To Expect From Barclays PLC And Standard Chartered PLC Results

The first week in March brings us the final two sets of full-year results from the FTSE 100‘s big bankers, with Barclays (LSE: BARC)(NYSE: BCS.US) set to report on 3 March and Standard Chartered (LSE: STAN)(NASDAQOTH: SCBFF.US) a day later.

Both have had very different rides since the banking crisis unfolded, and both have very different forecasts.

Back to strong growth

For Barclays, the City is predicting three years of double-digit growth starting with 2014’s figures, with the dividend climbing back up to yields not see since before the crash — the expected 2014 yield is down at a modest 2.5%, but forecasts see that ramping up to 3.6% in 2015 and 4.6% in 2016 on a share price of 262p.

Adjusted pre-tax profit for the nine months to September was up 5% to £4,939m, with asset values up and operating expenses falling — big redundancies over the previous 12 months made a significant difference to the latter. Liquidity ratios were up, with a CET1 of 10.2%, and Barclays went on to satisfy the Bank of England stress tests in December.

We’ve had 3p per share in dividends so far this year, and all in all, the current forecasts are likely to be pretty close to the mark. With a P/E ratio of under 13 based on expectations for 2014, dropping to under 9 for 2016 forecasts, I still rate Barclays a Buy.

Troubled management

Things are different at Standard Chartered, whose focus on Asia helped protect it from the bulk of the Western banking woes. But the bank has been suffering problems of its own, with its South Korean division performing badly, and that’s helped the shares to a 28% loss over 12 months.

We’ve had a chorus of complaints about board-level management, and Standard Chartered bowed to the inevitable on Thursday. Beleaguered chief executive Peter Sands is to be replaced by Bill Winters, with chairman Sir John Peace and Asia CEO Jaspal Bindra, along with 3 non-executives, making their exits too.

Forecasts suggest a 5% EPS fall for 2014, and only a very modest recovery in 2015. But dividend yields are expected to remain above 5%. With first-half pre-tax profit falling 20%, the interim dividend was held flat and cover still seems reasonable, and the bank’s liquidity ratios look more than adequate — a cut in the final payment would come as a shock now.

New strategy?

However the actual figures turn out, eyes will surely be peeled for a change in strategic direction now that there’s new top management on board. And that’s already pleased the market, with Standard Chartered shares up 3% to 954p since the shakeup announcement.

Standard Chartered’s P/E valuation is significantly lower than Barclays’, falling from a current 8.9 to only 7.7 on 2016 forecasts. If you trust the new bosses to at least do no worse, it would be worth an investment.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.