Lloyds annual profits slide 72pc, Aviva to exit Turkey joint venture

London open

The FTSE 100 is expected to open 28 points lower on Wednesday, having closed up 0.21% on Tuesday at 6,625.94.

Stocks to watch

Lloyds Bank reported a 72% slump in annual profits, reflecting the impact of the Covid-19 pandemic, but reinstated dividend payments. The UK’s biggest mortgage lender on Wednesday said pre-tax profits fell to £1.2bn as impairment charges increased to £4.2bn from £1.3bn a year earlier “primarily reflecting a significant deterioration in the economic outlook”. A final dividend of 0.57p a share was declared. Lloyds said it intended to accrue dividends and resume a “progressive and sustainable ordinary dividend policy”.

Aviva has agreed to sell its entire 40% shareholding in its joint venture in Turkey, Aviva SA, to Ageas Insurance International, for £122m cash. The FTSE 100 insurer said its joint venture partner Sabancı Holding would retain its 40% shareholding. The transaction was expected to increase Aviva's IFRS net asset value and Solvency II surplus by around £0.1bn.

Newspaper round-up

London has overtaken New York as home to the highest concentration of dollar millionaires in the world, according to a report that reveals how much money the very richest people in the world have made during the coronavirus pandemic. Nearly 875,000 Londoners are dollar millionaires (denoting assets worth more than £720,000), according to an annual study of the fortunes of the world’s wealthiest people by the property consultants Knight Frank. - Guardian

The number of female directors at FTSE-100 firms has increased by 50% in the last five years, and women now hold more than a third of roles in the boardrooms of Britain’s top 350 companies, according to the final report of a review into female representation at the top of business. Although men still dominate the top ranks of business, the government-backed Hampton-Alexander review has achieved its target of 33% of board positions at FTSE 100 and FTSE 250 firms being held by women by the end of 2020. - Guardian

Oatly, the Swedish non-dairy milk maker backed by Oprah Winfrey, is set to go public with a New York listing that could value it at up to $10bn (£7.1bn). The company, whose products are sold in more than 20 countries, said it had submitted plans to go public less than a year after securing investment from celebrities including Oprah Winfrey and Jay-Z in a funding round led by buyout firm Blackstone. - Telegraph

Britain’s accounting watchdog has announced new rules to separate further the audit and consulting arms of the Big Four firms. KPMG, EY, Deloitte and PWC are in the process of building walls between their audit and advisory teams on the orders of the Financial Reporting Council (FRC). The FRC announced the planned operational separation of the firms in July. The measures, which must be in place by June 2024, are aimed at preventing a repeat of accounting scandals in recent years at companies including Carillion and Patisserie Valerie. - The Times

FTSE 350 companies that are not doing enough to improve diversity on their boards could face a shareholder revolt at their annual meetings this year. The Investment Association, which runs IVIS, a paid-for information service on listed companies, said that for this year’s AGM season it would issue an “amber-top” tag for companies that do not disclose the ethnic diversity of their board, or do not have a credible action plan to achieve targets of having at least one director from an ethnic minority background by 2021. - The Times

US close

Wall Street stocks turned in a mixed performance on Tuesday as losses in tech shares dragged down the Nasdaq Composite.

At the close, the Dow Jones Industrial Average was up 0.05% at 31,537.35 and the S&P 500 was 0.13% firmer at 3,881.37, while the Nasdaq Composite saw out the session 0.50% weaker at 13,465.20.

The Dow closed 15.66 points lower on Thursday, narrowly extending modest gains recorded on Monday.

Rapidly-rising Treasury yields were again in focus on Tuesday amid concerns that they could hurt high-growth companies reliant on easy borrowing - the same stocks that have so far thrived in the Covid-19 pandemic.

The 10-year Treasury yield rose to around 1.35% on Monday after jumping 14 basis points last week to hit its highest level since February 2020.