CBG’s valuation premium has expanded significantly (Fig 1, page 2). It trades on 1.31x FY20e tNAV vs Paragon/OneSavings (both Buys) on 0.86x/0.76x respectively. CBG shares have outperformed all other UK banks in our coverage in 2020 year-to-date (Fig 2, page 2). We expect CBG to remain profitable through FY20-FY22e (Fig 3, page 3) despite a sharp fall in the Banking division contribution (Fig 4, page 3). We forecast a peak impairment charge of “only” 1.9% in FY20e vs 2.6% in FY09, (Fig 5, page 4) largely due to a lower risk property portfolio. We forecast a 53% YoY increase in the Securities division FY20e contribution (Fig 6, page 4). One perennial “bull” argument for which we give little credit is the idea that CBG is a counter-cyclical lender for which the forthcoming recession should represent an opportunity rather than a threat. History is supportive of this view; the loan book enjoyed a 20% CAGR through 2010-13 as competitors fell apart. Our simplistic view is that while various non-banks may become unable to fund new lending, this time, bank sector peers are well capitalised, liquid, and prudently positioned. We think CBG’s loan growth will remain weak; we forecast a 1.7% contraction in FY20e and growth of 2.5%/2.8% in FY21/22e (Fig 7, page 5). We suspect that consensus is currently evolving to “process” the likely timing of impairment recognition. We cut our EPS forecasts by 10%/7%/5% through FY20/21/22e which leaves us 5% below consensus in FY20e, but 22%/4% above in FY21/22e. We expect dividends to resume in FY21e (Fig 8, page 5). On 1.31x FY20e tNAV (Fig 9, page 6) for ROTEs of 10.6%/11.3%/12.1% through FY20/21/22e (Fig 10, page 6), we cut our TP to 1010p (from 1110p) and downgrade to Sell (from Hold).