BUZZ-UK challenger banks suffer worst day on record after bank levy change

** Challenger banks suffer worst day on record after UK Chancellor George Osborne announces levy on bank balance sheets to be replaced with an 8 pct surcharge on bank profits

** Aldermore down 12.2 pct, Onesavings falls 10.4 pct, Virgin Money down 9 pct with Shawbrook off 8.8 pct

** Easily worst day for all four stocks in their respective histories

** Challenger banks previously exempt from levy given the small size of their balance sheets

** Trader says news will see a straight 8 pct EPS downgrade from analysts

** Adds moves not overdone given levy also removes some of the sector's M&A premium, possible impact from crackdown on buy-to-let tax breaks (Aldermore and Onesavings seen as being more heavily affected)

(RM (LSE: RM.L - news) : alasdair.pal.thomsonreuters.com@reuters.net)