CYBG PLC Share Price Jumps Following Capital Markets Day

Holding company CYBG PLC/IDR UNRESTR [ASX:CYB] has experienced a jump in their share price this morning, following the announcement of their Capital Markets Day Presentation, released yesterday afternoon.

This morning, CYBC PLC shares are trading at $3.57, representing a 5.94% increase.

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Who is CYBG PLC and why are they making waves this morning?

We’ve been saying for a while that we believe traditional banking is on the way out, and something new will take its place. CYBG could be one such company.

Formed by NAB in 2016, UK Business bank CYBG PLC owns Clydesdale Bank, Yorkshire Bank and Virgin Money UK, and is now taking the next step into the future.

Ambitious to disrupt traditional banking procedures in the UK, CYBG have announced a refreshed strategy, and updated medium-term strategic and financial targets to Australian investors.

The company, which will be renamed Virgin Money UK PLC by the end of the year, is not much of a dividend payer compared to our big four. Rather, CYBG is targeting a conservative payout ratio of around 50%, when the big four can offer around 80%.

And while the UK disrupter may not have much to offer income-seeking investors with an estimated 2% yield, it has an appeal for customers seeking growth.

For investors keen on adding bankers to their portfolio, CYBG could be an attractive choice.

More on the update…

Due to the Virgin Money acquisition, CYBC has employed four new strategies to deliver value to customers.

They will do so by focusing largely on growth through ‘margin accretive assets and lower cost relationship deposits’, focusing largely on customer and colleague satisfaction, keeping a simple and straightforward service, and operating to deliver sustainable shareholder returns.

They report that a key part of this new strategy’s success is the Virgin Money brand, which will roll out towards the end of this year in three new divisions — Business, Personal and Mortgages.

We’re always excited to see a new trailblazer in the markets. And after observing the reaction in the UK overnight, we’re looking forward to seeing how Australian investors respond to the news.


Ryan Clarkson-Ledward,

For Money Morning

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Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

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