Royal Bank of Scotland, Bellway and esure

“Blue-chips confounded forecasts and opened strongly following calm turns on Wall Street and in Asia overnight as investors responded to the  Bank of England’s interest rate cut and other stimulus measures.,” says AJ Bell Investment Director Russ Mould.

“The pain continues for taxpayer controlled Royal Bank of Scotland with first half losses rising to £2.04bn from £179m a year ago and further hits on the horizon for exchange rate manipulation and payment protection insurance compensation. Restructuring costs are expected to remain high and Brexit has created considerable uncertainty in the bank’s core market. Investors will also have noted that while RBS has claimed it is on track with plans to make sure it can withstand financial shocks, it performed poorly in the latest European stress tests. RBS sat at the foot of the blue-chip board in early trading, down by more than 4.5%.

“Housebuilder Bellway’s shares rose following a bullish pre-close update. Bellway had an outstanding trading performance in the year to the end of July, achieving new records in both volume and operating margin. The full year results are expected to show housing revenue is increasing by around 27% to £2.2 billion with the number of housing completions rising to 8,721 to 7,752. Trading since the Brexit vote has been encouraging and with a strong balance sheet and robust land bank Bellway can be flexible and respond opportunistically to any changes in market conditions.

“Insurance group esure slashed its first half dividend after adverse weather claims hit underlying pre-tax profits. Gross written premiums rose by 16.3% while revenues from its price comparison site Gocompare.com increased by more than 22%. esure has cut the dividend to retain capital as it looks to take advantage of a favourable motor market.”

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