Ann: 3rd Quarter Trading Update, page-2

As turnarounds go, this one is setting a bit of a high benchmark.

All key operating metrics either on track, or ahead of expectations when the journey began some 18 months ago.

Today's Q3 update shows:

1. acceleration of asset growth ... Mortgages (81% of assets) up 5.8% SME loans (24% of assets) up 4.7%
(compared to loan growth of 4% at the interim result);

2. improved NIM of 2.29bps YTD (226bp @ interim result);

3. capital ratio stable at 12.4% (well within target range of 12% to 13%), and

4. better-than-expected cost reductions (operating expenses now expected to be "below 680m pounds", compared to "690m to 700m pounds" guidance at the time of the interim result announcement.

5. No signs of deterioration of asset quality (16 bp, annualised, impairment charge 16bp)


Running this update through my financial model for CYB results in ~8% to 11% increase to Pre-Tax Profits. I suspect analysts will be publishing similar adjustments to their forecasts in the days ahead.

Based on this, the stock is trading on a P/E of around 11.6x for FY2017, 9.8x for FY2018 and 8.9x Fy2019.

It is very difficult in this market to find a multi-billion dollar company presenting those sorts of un-demanding valuation metrics.