TIDMCYBG TIDM11IO
RNS Number : 3002D
CYBG PLC
30 January 2018
CYBG PLC
(Company)
LEI: 213800ZK9VGCYYR6O495
30 January 2018
CYBG PLC: First Quarter Trading Update
CYBG PLC ("CYBG" or the "Group") confirms that trading in the
three months to 31 December 2017 has been in line with
expectations, and reiterates the Group's FY18 and medium-term
guidance.
Continued sustainable growth in asset and deposit balances, despite
competitive environment
* Strong mortgage growth of 7.4% (annualised) to
GBP23.9 billion
* Core SME growth of 1.4% (annualised) with GBP567
million of new lending in Q1
* Deposit balances up 14.8% (annualised) driven by
strong performance in current accounts and personal
fixed term deposits
* Asset quality remains strong with a net cost of risk
of 12 bps (annualised) in line with expectations
Q1 NIM of 216 bps in line with expected quarterly profile - impacted
by strong deposit growth
* Increase in deposit balances to enable pre-funding of
lending growth
* Mortgage market competition saw front book yields
remain broadly stable in Q1 despite increased swap
rates
On track to deliver FY18 and medium-term guidance
David Duffy, Chief Executive Officer of CYBG PLC, commented:
"We have delivered another solid quarter of growth, despite a
competitive operating environment, seeing continued momentum in
both mortgage and SME lending. While the economic outlook remains
uncertain we remain focused on delivering sustainable and prudent
growth and are confident we will deliver our guidance for 2018 and
the medium term.
We also continue to take major strides in transforming CYBG into
the UK's leading digitally-enabled challenger bank, positioning us
strongly for the future banking landscape. Our iB technology
platform is ready for Open Banking today with full 'plug and play'
fintech capability, meaning we can offer real-time, integrated
services for our 2.8 million customers."
Customer balances
(GBPbn) At 31 Dec At 30 Sept At 31 Dec 17 YTD growth
16 17 (annualised)
-------------------- ---------- ----------- ------------- --------------
Mortgages 22.1 23.5 23.9 7.4%
Core SME 6.3 6.8 6.8 1.4%
Unsecured personal 1.1 1.2 1.2 6.5%
Deposits 27.3 27.7 28.7 14.8%
-------------------- ---------- ----------- ------------- --------------
We saw strong growth in mortgages with balances of GBP23.9
billion, representing annualised growth in Q1 of 7.4%, driven by a
particularly strong pipeline at year end. We anticipate that
mortgage growth will ease over the remainder of FY18, although we
continue to expect mid-single digit growth in balances for FY18.
Front book yields remained broadly stable through the period with
spreads narrowing slightly due to the increase in swap rates not
being fully passed on to customers across the market. While the
mortgage market remains competitive, we expect to see price
stability through the remainder of FY18.
We maintained momentum in SME origination, with GBP567 million
of gross loans and facilities written in the quarter. Strong new
business drawdowns of GBP525 million were offset by reduced
overdraft balances in our agriculture book. As a result, on an
annualised basis net core lending grew by 1.4% in Q1. We continue
to see a healthy pipeline to support new lending in 2018, in line
with our asset growth targets and our commitment to lend GBP6
billion over 3 years to our customers.
Deposit balances grew by 3.7% (14.8% annualised) in Q1, driven
by continued momentum in retail and SME current accounts and
personal fixed rate term deposits. B continues to perform well,
growing to over 150,000 customers at 31 December 2017 following a
successful cashback campaign in October.
Net Interest Margin (NIM)
Q1 NIM was 216 bps (Q4 FY17: 221 bps). As guided at our FY17
results, we saw a reduction in NIM for the quarter due to higher
than normal levels of liquidity (driven by strong growth in
deposits pre-funding asset origination) and continued competition
in the mortgage market.
We continue to expect the Group to deliver on its NIM guidance
of c. 220 bps for FY18.
Asset quality
Asset quality remained strong with an annualised net cost of
risk of 12 bps in the three months to 31 December 2017 (FY17: 14
bps).
Capital
The CET1 ratio was 12.4% at 31 December 2017, comfortably within
the Group's operating range and consistent with the FY17 year-end
position. Growth in credit RWAs and continued investment in the
business was funded by organic capital generation.
The Group continues to progress its IRB accreditation programme
in line with its plans.
Outlook
Despite the ongoing uncertainty in relation to the terms of the
UK's withdrawal from the European Union and its potential impact on
the outlook for the UK economy, we remain confident in our ability
to deliver the Group's FY18 and medium-term guidance.
Enquiries:
Investors and Analysts
Andrew Downey +44 7823 443 150
Head of Investor Relations andrew.downey@cybg.com
Owen Price +44 7484 908 949
Senior Manager, Investor Relations owen.price@cybg.com
Media (UK)
Christina Kelly +44 7484 905 358
Senior Media Relations Manager christina.kelly@cybg.com
Press Office +44 800 066 5998
press.office@cybg.com
Powerscourt
Victoria Palmer-Moore 07725 565 545
Justin Griffiths 07899 967 719
Media (Australia)
Citadel Magnus
Peter Brookes +61 407 911 389
James Strong +61 448 881 174
Forward looking statements
The information in this document may include forward-looking
statements, which are based on assumptions, expectations,
valuations, targets, estimates, forecasts and projections about
future events. These can be identified by the use of words such as
'expects', 'aims', 'targets', 'seeks', 'anticipates', 'plans',
'intends', 'prospects' 'outlooks', 'projects', 'believes',
'estimates', 'potential', 'possible', and similar words or phrases.
These forward-looking statements, as well as those included in any
other material discussed at any presentation, are subject to risks,
uncertainties and assumptions about the Group and its securities,
investments and the environment in which it operates, including,
among other things, the development of its business and strategy,
trends in its operating industry, changes to customer behaviours
and covenant, macroeconomic and/or geopolitical factors, changes to
its board and/ or employee composition, exposures to terrorist
activity, IT system failures, cyber-crime, fraud and pension scheme
liabilities, changes to law and/or the policies and practices of
the BoE, the FCA and/or other regulatory bodies, inflation,
deflation, interest rates, exchange rates, changes in the
liquidity, capital, funding and/ or asset position and/or credit
ratings of the Group, the repercussions of the UK's referendum vote
to leave the European Union, and future capital expenditures and
acquisitions.
In light of these risks, uncertainties and assumptions, the
events in the forward-looking statements may not occur.
Forward-looking statements involve inherent risks and
uncertainties. Other events not taken into account may occur and
may significantly affect the analysis of the forward-looking
statements. No member of the Group or their respective directors,
officers, employees, agents, advisers or affiliates gives any
assurance that any such projections or estimates will be realised
or that actual returns or other results will not be materially
lower than those set out in this document and/or discussed at any
presentation. All forward-looking statements should be viewed as
hypothetical. No representation or warranty is made that any
forward-looking statement will come to pass. No member of the Group
or their respective directors, officers, employees, agents,
advisers or affiliates undertakes any obligation to update or
revise any such forward-looking statement following the publication
of this document nor accepts any responsibility, liability or duty
of care whatsoever for (whether in contract, tort or otherwise) or
makes any representation or warranty, express or implied, as to the
truth, fullness, fairness, merchantability, accuracy, sufficiency
or completeness of, the information in this document.
The information, statements and opinions contained in this
document do not constitute a public offer under any applicable
legislation or an offer to sell or solicitation of any offer to buy
any securities or financial instruments or any advice or
recommendation with respect to such securities or other financial
instruments.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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