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Challenger bank CYBG going cheap in tough market

The retail banking spinout from National Australia Bank is being priced well below the value of its net assets
January 20, 2016

It's a tough time to be listing a financial services company. National Australia Bank (AU:NAB) this week set a knockdown price for the flotation of CYBG, which contains Clydesdale Bank and Yorkshire Bank. The price range set for February's initial public offering is 175p to 235p a share, giving a market capitalisation of £1.5bn to £2.1bn.

The price reflects a ratio to the delisted company's net tangible assets of 0.56 to 0.76 times. This makes it cheaper than competitors Lloyds Banking (LLOY) (0.9 times) and Virgin Money (VM.) (1 times), while shares in specialist OneSavings Bank (OSB) trade at 2.6 times book.

 

CompanyPrice-book value
CYBG0.56-0.76
Lloyds Banking Group0.9
Virgin Money1
Aldermore 1.3
OneSavings Bank2.6
Secure Trust Bank4.4

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