As discussed in our note, Treading water? (17 Nov), we regard CBG’s Q1 FY23 performance as underwhelming (albeit not particularly surprising), characterised by slowing loan growth, moderately elevated impairments and negative jaws within the Banking division, and ongoing market-related headwinds in both Asset Management and the Securities business. Ahead of the Q1 numbers, we thought consensus expectations were too high; we anticipate broad-based consensus downgrades, with the slowdown in loan growth to just 0.3% QoQ (vs +2.4% in Q1 FY22) particularly impactful. We forecast loan growth of 2%/3%/3% in FY23/FY24/FY25e (Fig 1, page 2). We continue to forecast very limited near-term recovery in the contributions from Asset Management and Securities (Fig 2, page 2), with a further 7% YoY reduction in u/l PBT within the Banking division. However, we make only 0.1-0.6% downgrades to our existing FY23-FY25e EPS forecasts. Indeed, in the context of CBG’s robust capital position (Q1 FY23 CET1 capital ratio: 14.6%), we expect it to maintain a progressive dividend. Our DPS forecasts of 70p/74p/78p through FY23/FY24/FY25e (Fig 3, page 3) imply a prospective dividend yield of 6.8%/7.2%/7.6%. Unlike most FTSE100 banks, CBG stood to usefully benefit from the “Truss plan” to cut UK corporation tax to 19% while raising the surcharge to 8%. Following the “coup”, with “25+3” reinstated in place of “19+8”, CBG’s £100m surcharge “allowance” is less valuable, but otherwise, perhaps the Autumn Statement was (at least for banks) no worse than expected? On 1.0x FY24e tNAV for ROTEs of 10.5%/11.0%/11.3% FY23/FY24/FY25e, (Fig 4, page 3) we now see the shares as close to fair value. We trim our target price to 1020p (from 1025p) but upgrade our rec to Hold (from Sell).