BUZZ-UK Banks: RBC prefers Lloyds Banking Group, CYBG
** RBC says while valuations in many cases are below post EU referendum lows, it is cautious on UK banks given the potential for a "no deal" Brexit or a general election
** Says there are some signs of the negative impact of Brexit on the UK economy and banks with corporate loan growth slowing and corporates holding on to cash
** "Brexit represents a supply side shock to the UK economy, which we expect is more negative to corporate exposures than retail," RBC says
** RBC says it "prefers retail over corporate exposure" and names Lloyds Banking Group and CYBG PLC as preferred stocks
** RBC upgrades CYBG to "outperform" from "sector perform" post Capital Markets Day, downgrades Paragon Banking Group to "underperform" from "sector perform" on valuation
** At CYBG's CMD on Wednesday, the company pledged to make 50 mln pounds in annual savings from the Virgin Money deal
** RBC cuts PT of Barclays PLC to 180p from 220p, Lloyds to 75p from 80p, Metro Bank Plc to 740p from 850p and Royal Bank of Scotland to 230p from 260p (Reporting By Geetha Panchaksharam)