A little over one month ago, Citi analysts agreed on taking a broadly neutral view post-CYBG’s Q3 report release, despite the fact that management’s guidance implied a steep fall for the Net Interest Margin (NIM) in the current quarter.
Post last week’s profit warning, due to “unprecedented” PPI claims, the analysts are of the view the subsequent sell-off in the equities has been too harsh. The analysts believe the bank will cancel its dividend rather than raising additional capital. The latter would be highly dilutive.
Earnings estimates have been lowered. The price target declines to GBP1.80 (was GBP2.45, then GBP2.15 in August). Buy rating retained.
Current Price is $2.04. Target price not assessed.