The Press and Journal (Inverness, Highlands, and Islands)
Profits at ‘challenger’ bank
CYBG: Statutory surplus recorded
The UK’s biggest banks are getting bigger but Scottish rival CYBG stands head and shoulders above other “challengers” in the industry, its boss said yesterday.
Chief executive David Duffy was speaking after CYBG – owner of the Clydesdale and Yorkshire banks – posted annual results showing its first statutory profits since 2011.
Mr Duffy, who joined the group as CEO in June 2015 and led it through its demerger from National Australia Bank and a flotation in February last year, said efforts to open up the sector and create competition in a market dominated by the likes of Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland were having the opposite effect.
The former Allied Irish Banks CEO added: “When I came to the UK, there was a hell of a lot of conversation about competition – but the bigger banks just get bigger.”
CYBG, with more than 3million customers, has scale and other advantages on its side as Britain’s “challenger banks” try to disrupt the market, according to Mr Duffy. “We are the only one that actually has an SME (small and medium-sized enterprise) business, he said, adding: “That’s fundamental.”
CYBG said the value of its core SME lending portfolio grew by 6%, or £383million to £6.8billion during the year to Septmber 30.
Underlying pre-tax profits at the two banks soared by 33% to £293million, from £221million a year ago, with the group highlighting a long-awaited return to the black in terms of statutory aftertax profits, which totalled £182million.
CYBG is investing about £350million on “transformation” projects including digital brand B, aimed at a new generation of techsavvy customers.
According to Mr Duffy, B and other CYBG invovations – such as the group’s new Studio B branch format – are transforming how people do their banking. For examples, SMEs can borrow up to £50,000 in less than 10 minutes.
“This is where the world of banking is going,” he said, adding: “Every other bank is talking about what they will provide in the future. We are doing it.”