BANKS and cigarettes will be the topic of discussion on the market next week.

Royal Bank of Scotland is expected to come out with sector-beating profit growth of 25 per cent when it reports on Thursday, fund manager Gerrard said.

Overall, profits are forecast to come in at £5.5bn, up from £4.4bn the previous year.

HBOS, the merged Halifax/Bank of Scotland, is set to show a slight dip in full-year profits, down one per cent to £2.9bn, when it reports on Friday.

Analysts say this is largely due to falling margins, despite continued volume growth, in its huge retail banking division.

Profits at British American Tobacco are expected to have puffed up to £2.4bn for the last year, against £2.3bn the year before.

The group, which makes Benson & Hedges, Lucky Strike and Rothmans, in December reaffirmed its earnings target for next year but warned operating profits would be affected by poor economic conditions, and the market will be keen for an update when it reports on Tuesday.

l Companies reporting next week:

MONDAY - Finals: Avis Europe, Bunzl, Cambridge Antibody Techn (Q4), Egg, Emblaze, Kerry Group, Michael Page, Old Mutual, RPS Group, Stratpro, Ultra Electronics. Interims: First Active Corp, Galliford Try, Sport Entertainment & Media,Transware.

TUESDAY - Finals: Aggreko, Amersham, British American Tobacco, Concurrent Technologies, Cookson Group, Datamonitor, Dominik Hunter, Innovation Group, Jardine Lloyd Thompson, Orchestream Holdings (Q4), Prudential, Riversoft (Q4), Tribune Trust, XTL Biopharmaceuticals. Interims: Morse, Thorntons, Ultimate Leisure.

WEDNESDAY - Finals: CGNU, Croda, Davis Service Group, Flomerics, Fyffes, Generics Group AG, Morien Group, Oxford Biomedica, Project Telecom, Provident Financial, Regus, Staffware, TDG, Wilson Bowden, Wimpey (George). Interims: Intec Telecom Systems (Q1), Knowledge Man Software, Sinclair (William) Hldgs, Sportsworld Media

THURSDAY - Finals: Chubb, CMG, Dawson International, Elementis, Hilton Group, Legal & General, Marlborough Sterling, Meriden Group, MFI Furniture, Norish, Oneclickhr, Rentokil Initial, Royal & Sun Alliance, Royal Bank of Scotland, Shire Pharmaceuticals, St James Place, Trinity Mirror, Weston Medical, White Young Green. Interims: Benchmark Group, Domestic & General

FRIDAY - Finals: Brixton, Ecsoft Group, Electric Word, HBOS, Johnson Service Group, Rank, Schroders