The other thing that we need to seriously consider after the...

The other thing that we need to seriously consider after the exit of the UK from EU, is the likelihood of Scotland gaining independence from the UK.

Page 22 of the Prospectus:

CYBG Group’s operations are focussed in its core regions in the UK, including Scotland. CYBG Group
could be adversely affected by a lack of legal harmonisation across the UK, including through the further
devolution of powers to the Scottish Parliament. For example, differences in regulatory regimes or differing
tax legislation between Scotland and England may result in additional compliance and other costs for CYBG
Group or adversely impact the financial performance and prospects of CYBG Group’s customers. The
likelihood of another referendum on Scottish independence would create uncertainty on Scotland’s position
within the UK, which may adversely impact CYBG Group’s associated costs, business, results of
operations, financial condition and prospects.

The historical results of operations and financial condition of CYBG Group have been, and its future results
of operations and financial condition are likely to continue to be, affected by these factors, which should
they have an adverse effect on consumer confidence, spending or demand for credit, could have a material
adverse effect on CYBG Group’s business, financial condition, results of operations and prospects.

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And these are the uncertainties that CYB will face in the near term after the surprised decision to exit the EU:

Page 27 of the prospectus:

7. CYBG Group faces risks relating to a proposed referendum on the UK’s continued membership in the
EU.

Following the UK general election that took place in May 2015, the UK Government has committed to hold
a referendum on whether the UK will stay in the EU by the end of 2017. CYBG Group faces risks
associated with the potential uncertainty during the period prior to and regarding the results of the
referendum and the consequences that may flow from a vote to exit the EU. For example, because a
significant proportion of the regulatory regime in the UK and forthcoming regulatory reform is derived from
EU directives and regulations, the referendum could materially change the regulatory regime that would be
applicable to CYBG Group’s operations in the future. This could increase compliance and operating costs
for CYBG Group and have a material adverse effect on CYBG Group’s business, financial condition, results
of operations and prospects.
Uncertainty around the outcome of the referendum could lead to adverse effects for the UK economy which
could also adversely impact CYBG Group, for example:
• increased funding costs for CYBG Group and UK banks more generally, due to a lack of clarity over
the UK’s status within the European single market;
• a reduction of investment and delays in capital expenditure decisions by businesses that would result
from a decision to leave the EU and a consequential reduction in demand for business lending; and
• the risk that international businesses choose to invest outside the UK in order to avoid political
uncertainty.
A referendum decision to exit the EU may also increase the possibility of another referendum on Scottish
independence from the UK, creating further uncertainty on Scotland’s position within the UK, which may
create additional costs for CYBG Group (including changes to pension arrangements, costs of regulatory
compliance and, if deemed necessary, a change of headquarters to England) and adversely affect its
business, results of operations, financial condition and prospects.
While CYBG Group is monitoring and assessing the potential impacts on its business of a referendum vote
in favour of an EU exit, the situation remains uncertain.

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Since Scotland voted overwhelmingly to stay in the EU, I believe, it is only a matter of time, before the Scottish get their second referendum to decide whether or not to stay within the UK.

If Scotland one day leaves the UK, CYB with half of the branches in Scotland and the other half in northern England, will definitely be negatively affected. The complexities in running the business will inevitably rise and this will be even more so if an independent Scotland adopts the Euro as their currency.


To be honest, my limited brain power is insufficient to analyse this complex inter-related situation. I have been trying to read the prospectus, but I find it so long and complicated that I wonder if anyone actually really reads it.

At the moment, my gut feeling says that over the medium term, the cost cutting measures will still outweigh the inevitable increase in operating costs. However, I feel that I shouldn't be making investment decision based on gut feeling.