...Modest Franchise : Fitch Ratings considers Yorkshire Building Society's (YBS) business model to be less diversified than that of commercial banks, w ith the ability to diversify limited by its mutual status. The society's franchise is modest w ith limited pricing pow er in its chosen segments although YBS's regional franchise is stronger, supported by its mutual status and loyal customer deposit base. We consider the society's company profile to be a constraining factor of higher importance in assessing its Viability Rating (VR). Legacy Loan Book : Impaired loans amounted to 2.6% of gross loans at end-2018, at the upper end of YBS's peer group. This reflects a higher proportion of Stage 3 purchased or credit-impaired (POCI) loans than peers. YBS has an above-average appetite for higher loan/value (LTV) mortgage lending, although average LTV levels are comparable w ith those of peers. The proportion of high-risk commercial real estate and buy-to-let (BTL) lending is modest by sector standards....
