City withdraws from CYBG as challenger fades

Shares in CYBG took a hit on Tuesday as the challenger bank disappointed the City because of a fall in deposit balances.

The company behind the Clydesdale and Yorkshire banks saw profits up 15% to £123 million for the half-year.

RBC Capital Markets thought CYBG missed forecasts on several measures and thinks the shares are overvalued anyway. It prices them at 200p. Today the stock fell 4% to 278p.

Finance director Ian Smith said it was “an improved performance with steady growth and more to come”. Customers will soon get faster decisions on loans, he said, as the “only true full-service challenger bank” ups its game.

CYBG has yet to pay a dividend but it says there will be one come the full year. The bank is shutting 79 branches.

Chief executive David Duffy added: “As the only true full-service challenger bank of scale across both retail and SME in the UK market, we have been able to deliver ahead of market growth in mortgages and growth in core SME banking, as well as making a strong start to our commitment to provide up to £6 billion of lending to SMEs over the next three years.”