CYBG PLC

LEI: 213800ZK9VGCYYR6O495

01 November 2017

CYBG PLC - re National Australia Bank full year results

National Australia Bank Limited ("NAB") has today announced its results for the twelve months to 30 September 2017. NAB has recognised a charge in connection with claims that have been, or are expected to be, made by CYBG PLC ("CYBG" or "the Group") in connection with the conduct indemnity deed between CYBG and NAB (the "Conduct Indemnity Deed").

CYBG will increase its provisions for legacy conduct costs as at 30 September 2017 by £403 million and under the terms of the Conduct Indemnity Deed CYBG is required to fund 9.7% of this provision increase. As a result, CYBG will recognise a further charge of £39 million (pre-tax) in its income statement for the twelve month period ended 30 September 2017, with the balance being funded by NAB. This will impact CYBG's CET1 capital ratio by approximately 20 bps as at 30 September 2017, with the Group's CET1 ratio remaining comfortably within its 12-13% guidance range.

The increase in the conduct provision principally relates to:

·    an updated forecast of the costs of finalising the remaining cases within CYBG's PPI remediation programme; and

·    a revised estimate of the expected level of walk-in PPI claims and the cost of customer redress between now and the time bar in August 2019.

At 30 September 2017 CYBG has, through a combination of on-balance sheet provisions and the indemnity provided by NAB, unutilised cover of £671 million for legacy conduct matters. CYBG considers that, following the recent completion of the past business review, the substantial completion of the remediation programme, and based on our updated assumptions, the unutilised cover is sufficient to cover the costs of dealing with legacy conduct matters.

Further details will be provided when CYBG announces its full year results on 21 November 2017.

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Forward looking statements

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In light of these risks, uncertainties and assumptions, the events in the forward looking statements may not occur. Forward looking statements involve inherent risks and uncertainties. Other events not taken into account may occur and may significantly affect the analysis of the forward looking statements. No member of the Group or their respective directors, officers, employees, agents, advisers or affiliates gives any assurance that any such projections or estimates will be realised or that actual returns or other results will not be materially lower than those set out in this document and/or discussed at any presentation. All forward looking statements should be viewed as hypothetical. No representation or warranty is made that any forward looking statement will come to pass. No member of the Group or their respective directors, officers, employees, agents, advisers or affiliates undertakes any obligation to update or revise any such forward looking statement following the publication of this document nor accepts any responsibility, liability or duty of care whatsoever for (whether in contract, tort or otherwise) or makes any representation or warranty, express or implied, as to the truth, fullness, fairness, merchantability, accuracy, sufficiency or completeness of, the information in this document.

The information, statements and opinions contained in this document do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of any offer to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments.