Morningstar | CYBG’s FY18 Result Disappoints and Earnings Pressure Builds
Clydesdale management has delivered an impressive turnaround since the bank was spun out of National Australia Bank in early 2016. The high fixed cost base has been cut, and we see good prospects for improvements in operational efficiency and, eventually, return on equity, or ROE. Legacy customer conduct issues continue to disappoint, and uncertainty remains. The focus on product innovation, process simplification, cost reduction, and capital optimisation has established a solid platform for growth. The merger with Virgin Money provides good earnings upside, but the significant increase in integration risks is a concern. In addition to forecast merger synergies, there is further upside from potential revenue and funding initiatives. A strong capital position, a diversified funding base, and a high-quality loan book impress.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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