Investors in the Royal Bank of Scotland will be eager find out whether the bank will announce another dividend this week, as UK lenders reveal their third quarter results.
The bank, which last year returned to profit for the first time since the 2008 financial crisis, recently paid its first dividend in 10 years.
RBS paid an interim dividend of 2p per share on 12 October after announcing the decision in its second quarter results, and analysts expect clarity on a potential second dividend in the lender's July to September statement, to be published on Friday.
Total income for the third quarter is expected to be £3.29bn, a drop from £3.38bn last quarter while profit is expected to jump from £613m to £892m, the bank said.
RBS paid a $4.9bn fine to settle a dispute with the US Department of Justice in August over claims it misled investors in the lead up to the financial crash.
"Having returned to profit last year as well as finally drawing a line under its dispute with the US Department of Justice, the bailed out bank now needs to show that its underlying business model can still deliver a return in a UK economy that appears to have had a decent last six months,” said CMC Markets chief market analyst Michael Hewson.
“Speculation over whether the management will be able to continue with a regular dividend has been rife since the conclusion of the DOJ agreement earlier this year. Earlier this month the bank paid its first dividend since the bank was bailed out and this latest update should go some way to showing whether this likely to become a regular feature.”
“The recent resumption of dividend payments after a 10-year break was hugely significant,” added Interactive Investor head of equity strategy Lee Wild, “but shareholders will demand much more as reward for owning these risky shares.”
The taxpayer is still the majority shareholder in the bank, which was bailed out by the UK government and the public owned 62 per cent of RBS as of June this year.
Barclays will kick off the bank reporting season on Wednesday, with the market expecting pre-tax profit of £1.1 bn, followed by Lloyds Banking Group on Thursday. HSBC will report next Monday
"Because sentiment around Brexit is so poor, any sniff that the outcome might not be as bad as currently feared would likely give domestic banks a significant lift," Will commented.
"It’s certainly what Lloyds Banking Group needs. Down 22 per cent from its 2018 peak just below 73p, the shares now trade near a two-year low. But nothing in these numbers is expected to move the needle