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BUZZ-UK specialist lenders: Jefferies cuts PTs on pandemic impact

Mon 27th April, 2020 5:54am
** Jefferies downgrades Close Brothers Group  CBRO.L  to
"underperform" from "hold"; cuts PT to 800p from 1,140p
    ** Brokerage says CBRO's earnings most sensitive to lower
new lending in current crisis, given its loan book with shortest
duration compared with Paragon Banking  PAGPA.L  and OneSavings
Bank  OSBO.L 
    ** Says all three specialist lenders have strong balance
sheets but will be affected differently by the coronavirus
    ** Does not expect most lending businesses to get back to
pre-virus levels until H2 2021    
    ** Cuts PT on OSBO ("buy") to 410p from 480p; says OSBO is a
much larger business, which what is arguably a higher quality
loan book and a more robust balance sheet
    ** PAGPA ("buy", PT: to 400p from 680p) has become much more
diversified on asset and liability sides of its balance sheet,
crucially, having access to retail funding - Jefferies
    ** Brokerage assumes any lending relying on a physical
inspection of asset will cease completely in calendar Q2 and
that there will be no new development lending, nor drawdowns on
existing loans, with asset finance also ceasing
    ** Up to Friday's close, CBRO shares down 34.7% YTD, PAGPA
down 39.6% and OSBO down 50.5%

 (Reporting by Pushkala Aripaka in Bengaluru)
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