UK banks

Research evidence excerpt

UK banks

RBC Europe Limited

Benjamin Toms, ACA

(Analyst)

+44 20 7002 2258,

benjamin.toms@rbccm.com

Pablo de la Torre Cuevas

+44 20 7653 4553,

June 22, 2026 pablo.delatorrecuevas@rbccm.com

UK banksRESEARCH We estimate Aldermore could come with a price tag of £1.35bn

Our view: Following Sky News reporting that LLOY & SHAW (not covered) are exploring a potential

takeover of Aldermore (not listed), we have published an Aldermore valuation model, from which we

can imply a potential valuation for the bank of c.£1.35bn (range £1.1bn-£1.6bn). It is difficult to see

the longer-term strategic attractiveness for LLOY vs alternative opportunities in the wealth space. For

SHAW, it is difficult to see how the bank could execute this acquisition without being captured by MREL.

Catalyst for writing the noteEQUITY Sky News reported today that LLOY is exploring a potential takeover of Aldermore (ALD) and has begun

preparations for a possible bid for the South African-owned bank. SHAW (not covered) has also been

linked by Sky News (23/04/26) as exploring a potential bid for ALD. None of the companies have

responded to the report. As a reminder, Aldermore announced in April 2026 it was working with its

owner, FirstRand Group, and respective regulators on an "orderly ownership transition".

We have built an Aldermore model

In the absence of consensus estimates, we have built a bottom-up ALD valuation model to derive its

potential valuation and assess potential scenarios. Having considered >10yr of historical financial data,

our key modelling assumptions going forward include: i) Stable NIM vs the H1'26 level of c.3.5% (avg.

FY12-25 of c.3.4%); ii) Loan book CAGR FY25-28E c.6% (FY19-25 CAGR c.8%); iii) Underlying cost growth

p.a. of c.2%, leaving our FY28E cost-to-income ratio at c.52% (avg.