Note kicks off with a quick review of key UK & Ireland developments followed by a deep dive on CBG's FY24 results, key points from the S&U trading update and Together's FY24 results
Very Interesting artical. Would you be able to shed some light on how SB has such a strong NIM compared to other competitors like Paragon, Shawbrook, Cynergy etc.
Hi Remy, the short answer is that it is due to differences in loan mix (the liability cost differences are not as stark) - Close focuses on higher margin lending product (e.g., motor finance, property developmet finance) so it benefits from materially stronger asset yields. Of course this is reflected in a higher cost of risk (i.e., loan impairment charges) so the analysis is more nuanced at a risk-adjusted margins level. The net interest margin is only one part of the picture!
Very Interesting artical. Would you be able to shed some light on how SB has such a strong NIM compared to other competitors like Paragon, Shawbrook, Cynergy etc.
Hi Remy, the short answer is that it is due to differences in loan mix (the liability cost differences are not as stark) - Close focuses on higher margin lending product (e.g., motor finance, property developmet finance) so it benefits from materially stronger asset yields. Of course this is reflected in a higher cost of risk (i.e., loan impairment charges) so the analysis is more nuanced at a risk-adjusted margins level. The net interest margin is only one part of the picture!