UK SMID LENDERS: We remain positive on our preferred names post Brexit, where we think current valuations reflect more pessimistic expectations than our base case estimates of a mild Brexit recession. Among the specialist lenders, we prefer Aldermore and Shawbrook (both OP) and among the pure-play challenger banks, we prefer Clydesdale (OP). We upgrade OSB to Neutral. There the BTL-focused business model remains our main concern but trading at c1.1x 17E TNAV for a c20%/17.5% ROTE in 17/18E valuations have become more supportive.