KBRA Releases Research – UK Challenger Banks: Profitable Niches Are Key

DUBLIN--(BUSINESS WIRE)--Kroll Bond Rating Agency Europe Limited (KBRA) releases its UK Challenger Banks: Profitable Niches Are Key report, which describes challenges facing UK retail bankers and explains why, in KBRA’s opinion, some challengers have more resilient business models.

The key takeaways from the report include:

• UK retail banking profitability has been hit by an escalating price war in the mortgage market during the past 18 months, with margin compression hitting banks with lending concentrated in mainstream residential mortgages.
• The struggles of Metro Bank, the combined CYBG/Virgin Money, and Santander’s large writedown on its UK business in 2019, have cast an unfavourable light on the challenges facing retail bankers.
• In KBRA’s opinion, banks need a significant scale of operations and/or a profitable niche with appropriate risk-based pricing of loans to attain sufficient and sustainable returns.
• Despite the checkered success of those trying to take share from the entrenched UK high street banks, KBRA believes that several challenger banks have resilient business models, supported by their specialist focus, achievable financial goals, and appropriate governance and risk frameworks.

To access the full report, click here.

Related Publications: (available at www.kbra.com)

• United Kingdom: Surveillance Report
• UK RMBS: Market Uncertainty, BTL Demand to Remain
• UK Challenger Banks: An Overlooked Growth Story

CONNECT WITH KBRA

Twitter 
LinkedIn 
YouTube

About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.