CYBG / Virgin Money and William Hill

“The FTSE is on the verge of breaking through the 7,600 level once again, meaning it only has to rise by approximately 2.5% from the current 7,591 level in order to achieve a new record high. The previous market close record was 7,778 on 12 January 2018,” says AJ Bell Investment Director Russ Mould.

CYBG / Virgin Money

“CYBG has often been seen as the ugly duckling of the UK quoted banking sector.

“Its former parent National Australia Bank didn’t want the business because it wasn’t as profitable as its operations in Australia and New Zealand.

“CYBG has lived in the shadows of the big players like HSBC and Lloyds, as well as the growing ranks of challenger banks.

“Its future was inevitably going to focus on consolidation in order to build up scale, hence why its interest in Virgin Money may not surprise anyone following the banking sector.

“Having previously expressed an interest in Royal Bank of Scotland’s Williams & Glyn operation before that business was no longer up for sale; CYBG’s latest manoeuvre looks an interesting path to follow.

“Theoretically it would see CYBG strengthen its position in the mortgage market and expand into credit cards. Virgin Money would have instant access to current accounts and small business lending.

“It will be interesting to see what a successful bid would mean for Virgin Money’s plans to launch its own digital challenger bank, a proposition that was earmarked for testing later this year, offering current accounts and savings products. Perhaps that technology platform could be the ticket to help modernise CYBG.”

William Hill

“Can trading ever be too good? In effect that’s the picture which emerges from gambling firm William Hill’s first quarter trading update.

“Its UK business saw a big boost in margins thanks to an ‘unprecedented run of bookmaker-friendly sporting results’ but the amounts wagered fell as punters reacted by betting less.

“William Hill’s shares trade slightly higher on the mixed update but a decision on the maximum limit on fixed odds betting terminals (FOBT), which could come later this week, is likely to have a greater bearing on the future performance of the shares.

“Bookies have historically derived a big chunk of their profit from the high-margin FOBTs so the threat to cut the maximum stake from £100 to £2 could have a big impact.”

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