CYBG has announced an increase in payment protection insurance provisions of GBP350m. The broker has downgraded its FY18 "company defined" profit forecast by -65%. This does not impact on earnings forecasts.
The broker finds the quantum and the timing of the provision top-up disappointing but has not changed its positive view on the stock, which is a cost, revenue and capital story. Any share price weakness is a buying opportunity, the broker suggests.
Outperform and $6.00 target retained.
Target price is $6.00.Current Price is $5.19. Difference: $0.81 – (brackets indicate current price is over target). If CYB meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges – negative figures indicate an expected loss).