Despite governments' and central banks' measures to contain the COVID-19 pandemic, global economies face an unprecedented challenge and there are substantial downside risks. We think nonoperating holding company (NOHC) Virgin Money UK PLC's (Virgin Money) balance sheet and risk management will prove resilient despite the adverse operating environment. We are revising our outlook to negative on Virgin Money and operating company Clydesdale Bank PLC (Clydesdale). We are affirming our issuer and issue ratings on both entities. The negative outlooks reflect our expectation that the negative economic environment will weigh on asset quality and earnings. It also reflects that Clydesdale may struggle to maintain an additional loss-absorbing capacity (ALAC) ratio sustainably above 8% of S&P Global Ratings' risk weighted assets (RWAs)
