PRG.L Share News (PRG)

(ShareCast News) - The share price drops in Britain´s challenger banks following the Brexit referendum looked overdone, the Financial Times´s Lex column argued.Over the two weeks after the vote shares in Aldermore, OneSavings, Shawbrook and Paragon gave back between 12% and 40% of their market capitalisations, yet investors in their bonds barely flinched as reflected in the nearly unchanged prices for those instruments.Aldermore would appear to be a particularly egregious case, the tipster explained.For the book value implied in its share price to be correct would require that its loan impairments rise by a factor of 28 from their level in 2015 (to £7.16 for every £100 of loans).Yet during the 2008/9 crisis, the likes of Paragon recorded an increase of just 170 basis points in impairments with actual losses peaking at 33 basis points. Loan-to-value ratios for mortgages are also now much lower, for example, Lex said.Furthermore, gilt yields imply interest rates atying lower for longer, helping to make mortgages more affordable. "Yes, lender probably face a downturn, but investors are pricing in a disaster." Rolls Royce´s purchase of the 53.0% of Spanish engine-component manufacturer ITP it did not already own may not be a reason to boast, Lex said.Indeed, the acquistion was triggered by that country´s privately-owned engineering group Sener, which held an option to sell its stake.ITP builds components for engines, including Rolls´s Trent series, and has worked with Rolls Royce since the late-1980´s.At €720m (and no debt), or 11.5 times´ ITP´s 2015 earnings before interest, tax, depreciation and amortisation, that might look like much for a £13.5bn company.However, Rolls´s internal restructuring is already putting pressure on profits and cash flow.Indeed, UBS calculates Rolls Royce will need to borrow to pay its sharply reduced 2016 dividend.As well, economic uncertainty on the other side of the channel may lead airlines to cut capacity, thus reducing demand for engine maintenance.Like the sudden downpour at Farnborough yesterdaym external events may yet rain on Rolls´s parade too.