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Deutsche Bank resumes coverage of CYBG with 'hold' rating after Virgin Money takeover

The newly merged CYBG and Virgin Money business should deliver cost and revenue synergies through lower funding costs, Deutsche Bank said.
virgin money
CYBG completed its £1.7bn deal to buy Virgin Money last October

Deutsche Bank has resumed coverage of CYBG PLC (LON:CYBG) with a ‘hold’ rating and target price of 184p following the challenger bank’s acquisition of Virgin Money.

CYBG, which also owns Clydesdale Bank and Yorkshire Bank, completed its £1.7bn deal to buy Virgin Money last October.

READ: CYBG completes £1.7bn takeover of Virgin Money

“The enlarged group is primarily focused on providing mortgages (84% of balances), SME lending (11%), credit cards (5%), as well as current accounts and savings to retail and business customers,” Deutsche Bank said.

"The combination should, in time, deliver cost synergies and revenue synergies (via lower funding costs for the group), and we expect the group to capitalise on the use.”

In mid-morning trading, shares in CYBG rose 2.6% to 178.5p. 

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