Bulletin: Failure To Win U.K. Business Banking Fund Is A Setback To CYBG's Expansion Plans

LONDON (S&P Global Ratings) Feb. 22, 2019--Contrary to our expectations, CYBG PLC has not been named as one of the three banks to be awarded large grants as part of a plan to promote more competition in U.K. business banking. We consider this a setback to CYBG's plans to both expand and diversify its franchise and improve the strength and quality of its earnings profile. CYBG's loan book bias became more heavily weighted toward residential mortgages following its transformational acquisition of Virgin Money in 2018. CYBG states that its £71.9 billion loan book split at Dec. 31, 2018 was mortgages (83%), small business lending (11%), and retail unsecured lending (6%), which is a more concentrated profile than rated U.K. peers',

...LONDON (S&P Global Ratings) Feb. 22, 2019--Contrary to our expectations, CYBG PLC has not been named as one of the three banks to be awarded large grants as part of a plan to promote more competition in U.K. business banking. We consider this a setback to CYBG's plans to both expand and diversify its franchise and improve the strength and quality of its earnings profile. CYBG's loan book bias became more heavily weighted toward residential mortgages following its transformational acquisition of Virgin Money in 2018. CYBG states that its ú71.9 billion loan book split at Dec. 31, 2018 was mortgages (83%), small business lending (11%), and retail unsecured lending (6%), which is a more concentrated profile than rated U.K. peers', other than Nationwide Building Society. The Board of Banking Competition Remedies (BCR) today announced the award of the Pool A grants of the Capability and Innovation Fund, with a combined value of ú280 million. This fund is designed to promote competition in U.K....

Bulletin