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Prices & Quotes - UK Markets - Paragon Banking Group (PAG)

Risk Warning The value of investments can fall as well as rise and any income from them is not guaranteed and you may get back less than you invested. Past performance is not a guide to future performance.

Share Price:
Down 460.40p
Change Today:
-4.60p
Market Cap:
1,182.01m
Sector:
Financial Services

Liberum initiates coverage of challenger banks, OneSavings top pick

By Abigail Townsend

Date: Tuesday 08 Dec 2020

LONDON (ShareCast) - (Sharecast News) - Liberum has initiated coverage of five challenger banks and specialist lenders, with 'buy' ratings on OneSavings Bank, Virgin Money UK and Paragon Banking Group.
The broker argued that more than a decade after the financial crisis, the promise of healthy returns had "failed to materialise" at the UK's larger banks.

"Meanwhile, despite large provisions for Covid-19, specialist lenders continue to exhibit good levels of growth and profitability driven by higher yields in niche markets, either through greater human skill or data analytics," it said.

"Our detailed stress test, based on the FPC's desktop stress test, which assumed UK GDP falling 14% and unemployment rising to 8% in 2020, show that all the banks would remain well capitalised in such a scenario.

"As large UK banks focus on cost reduction and price sensitive mainstream lending, the specialist lenders are filling the gap in those lending markets which require greater sophistication and bespoke service."

Of the challenger banks, Liberum said it preferred Virgin Money UK as it believed "the scepticism regarding the group's potential returns and merger synergies are under-appreciated". It added that the brand was in a "prime position to disrupt the status quo of the personal and SME banking markets, driven by an innovative digital platform and a diverse funding model".

Its top pick is OneSavings Bank, with a price target of 535.0p. "It is the most profitable, best capitalised and has the highest growth," Liberum said.

Close Brothers, which the broker called a "safe pair of hands", has a 'hold' rating with a 1,435.0p price target, but Metro Bank has a 'sell' rating. "Despite recent management changes, we fail to make an investment case for Metro Bank given the lack of visibility to profitability," Liberum said.

"Although the new chief executive may change the culture of high growth at any costs, the 400m investment spend will further erode capital and delay profitability."

Liberum has a price target of 94.0p on Metro.

Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

 

PAG Market Data

Currency UK Pounds
Price 460.40p
Change Today -4.60p
52 Week High 493.60p
52 Week Low 238.60p
Volume 451,169
Shares Issued 256.74m
Market Cap 1,182.01m

Performance Indicators

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What The Brokers Say

Strong Buy 9
Buy 1
Neutral 3
Sell 0
Strong Sell 0
Total 13
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

PAG Dividends

  Latest Previous
  Final Final
Ex-Div 28-Jan-21 09-Jan-20
Paid 26-Feb-21 17-Feb-20
Amount 14.40p 14.20p

Trades for 05-Mar-2021

Time Volume / Share Price
16:36 974 @ 460.40p
16:36 1,454 @ 460.40p
16:35 172,509 @ 460.40p
16:29 211 @ 459.80p
16:29 300 @ 459.80p

PAG Key Personnel

CEO Nigel S Terrington
CFO Richard Woodman
Chair Fiona Clutterbuck