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CYBG PLC

CYBG PLC Joint venture with Salary Finance

CYBG PLC (LON:CYBG) today announced that Clydesdale Bank PLC, a wholly owned subsidiary of CYBG, has entered into a joint venture with Salary Finance Limited to add an innovative channel to CYBG’s personal lending business.

Salary Finance is an innovative FinTech platform that connects to the payroll of participating employers to provide financial wellbeing benefits to employees, including salary-deducted savings, and loans, as well as financial education. Salary Finance will provide the JV with all of the services required for its business, including loan origination and management, marketing, cash management and other corporate services.

The JV is complementary to CYBG’s existing product plans and will provide an incremental opportunity to develop CYBG’s unsecured loan business within risk appetite.

David Duffy, Chief Executive of CYBG, said: “We’re delighted to be expanding our lending proposition into new areas through this new Joint Venture with Salary Finance.”

“We have been hugely impressed by the Salary Finance team and the clear social purpose underpinning everything they do and we are delighted to be able to support the growth of this innovative platform.”

“The Joint Venture adds to CYBG’s growing range of partnerships – with over 40% of UK consumers regularly using FinTech services, there is clear value in partnering with innovative new providers like Salary Finance.”

Details of the Transaction

Clydesdale and Salary Finance will each acquire a 50% stake in the JV, in return for an initial cash consideration of £0.5m each. Clydesdale will provide a 6-month rolling credit facility to the JV, subject to ongoing fulfilment of the JV’s business plan.

The debt funding provided by Clydesdale under the credit facility will be for an initial total commitment of approximately £100m, and may increase, subject to approval of the JV’s total funding requirement by both Clydesdale and Salary Finance.