Clydesdale (ASX: CYB) share price rallys on first quarter update
Stock
Clydesdale (ASX: CYB) $3.75 as at 7/02/2019
Event
The old UK arm of NAB has jumped early in the day, after a better than expected 1st quarter update that was released to the market overnight.
In UK trade, the Clydesdale stock rallied ~13%, however in our market it is up over 17% as it looks to claw back some of the slump since mid-2018.
The market’s reaction has been driven by two major pieces of the update with the net interest margin (NIM) reporting better than expected, while further increases to the expected synergies of the merger with Virgin Money were also announced.
After seeing sliding margins over the last 12 months, Clydesdale’s NIM remained steady at 172bps driven by better mortgage loan growth and liquidity in institutional funding which offset the slow deposit growth. The company update NIM guidance for the full year to the higher end of the previous range, now 165bps-170bps
The bank also increased the minimum level of cost synergies it expects to achieve, upgrading it from £120m/year to £150m/year from FY21 onwards. A nice 25% increase to the synergies which continue to validate the merger with Virgin Money.
Clydesdale (ASX: CYB) Chart
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