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Increased provisions drag CYBG to H1 loss, knock value of Virgin offer

CYBG Plc reported an unaudited after-tax statutory loss attributable to equity holders of £76 million for the six months to the end of March, on the back of a £350 million increase in provisions the British bank booked in March for the misselling of payment protection insurance.

CYBG booked a profit of £30 million in the same period a year earlier.

CYBG on May 8 said it had made a preliminary offer to acquire rival Virgin Money Holdings (UK) PLC based on an exchange ratio of 1.1297 new CYBG shares for each Virgin Money share. CYBG shares were down more than 5.6% to 305 pence apiece May 15, meaning that the value of its Virgin Money offer stood at roughly £1.55 billion, compared to £1.65 billion based on its prior-day close.

CYBG, which did not give an update regarding the bid, is required to announce no later than June 4 if it will make a firm offer for Virgin Money or abandon its bid for the lender.

Virgin Money shares were down 2.8% on May 15.