The Courier & Advertiser (Perth and Perthshire Edition)
Clydesdale celebrates maiden year with profit
Scottish-based bank in black for first time in five years after demerger
The Clydesdale & Yorkshire Banking Group achieved its first annual profit in five years in its first year as a standalone business.
Glasgow- based CYBG, which demerged from former owner National Australia Bank in February, enjoyed what its Dundee-born chairman Jim Pettigrew hailed as “a landmark year”.
It posted bottom-line pre-tax profits of £77 million for the 12 months to September 30 against a loss of £285m the previous year.
Mr Pettigrew added: “Our ambition is straightforward: to become the credible alternative to the big UK banks.
“We intend to achieve this using our scalable infrastructure to support our growth ambitions and our enhanced digital capability to streamline processes and deliver a superior customer experience.”
The group has made an offer to buy Royal Bank of Scotland’s 300-strong Williams & Glyn branch business, after Santander pulled out of talks.
CYBG is also cutting jobs and branches as part of a drive to slash costs by an extra £100 million.
It said in September that it will trim its branch network further, from 248 to less than 200 over the next three years.
Alongside the cost savings, it is investing more than £350 million over the next two years to overhaul the group by improving its online banking offering and boosting technology platforms.
CYBG said it has seen a “limited” impact on its business from the Brexit vote, with mortgage lending still robust and lending to small businesses higher for the first time in four years.
It warned that lower-for-longer interest rates – following the cut to 0.25% in August – would put pressure on its interest margins.
The group grew its mortgage lending by 6.5% over the year and saw its small business loan book increase by 6.1%.
On an underlying basis, pre-tax profits rose to £221m from £159m the previous year.
It said it has not increased cash set aside for payment protection insurance compensation, despite the recent move to put back the deadline for claims by a year.
Shares in CYBG fell 9p to 285.7p, but the stock has risen by nearly two-thirds since its demerger in February.