Clydesdale (CYB) continues the share price slump
Stock
Clydesdale Bank (CYB) $3.25 as at 31/07/2019
Event
The UK bank Clydesdale has slumped over 9% today following the release of their 3Q update overnight. The old arm of NAB has fallen from grace over the last 12-months as low loan growth and falling margins eat away at profits.
Overnight the bank reported net interest margin (NIM) had fallen another 7bps in the quarter alone as funding costs creep higher and mortgage rates fall. The annualized NIM rate of 168bps is substantially below Lloyds bank which regularly sees NIM above 250bps while Australian banks generally record NIM above 200bps.
Eating away at the other end of the spectrum is low loan growth with mortgages falling for the bank. In an attempt to rectify the falling loan book Clydesdale has targeted the higher risk unsecured and credit card lending market which will likely lead to a spike in bad debts down the track.
Clydesdale Bank (CYB) Chart
Market Matters Take/Outlook
