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May 28 2019, 06:30 IST/BST
Ratings and price correct at time of issue
|Company||Rating||Date||Previous Rating||Date||Closing Price|
|Lloyds Banking Group||OUTPERFORM||28/05/19||Neutral||14/02/18||58.5p|
|Virgin Money UK||NEUTRAL||28/05/19||N/A||N/A||188p|
Retail banking in the UK remains challenging, not helped by an uncertain macro environment. We initiate on CYBG with a ‘Neutral’ rating (price target: 159p). The Virgin Money (VM) acquisition creates significant opportunities from an integration and customer perspective; however, we are less optimistic on the latter than the former due to the challenging sector backdrop. In addition, we upgrade Lloyds Banking Group (LLOY) to ‘Outperform’ (price target: 71p) given that it is less dependent on growth due to its superior capital generation, driving substantial capital returns in the coming years.