CYBG to update on plans in wake of Virgin Money deal

● Timetable for phase-out of Clydesdale and Yorkshire brands among key issues

group CYBG will update investors on plans for the newly enlarged business to raise the stakes in the competition against its larger rivals when it reports an expected rise in full-year profits on Tuesday.

The results announcement will come just weeks after the Glasgow-based group behind the Clydesdale completed the £1.7 billion acquisition of Virgin Money in a deal which creates the UK’S sixth largest bank.

Analysts at UBS expect CYBG to report profit before tax of £333 million for the year, up from £293m in 2017. Revenue is expected be flat on last year’s £1.02bn. But the spotlight will be more on the group’s future plans to win greater market share from giants such as Barclays, Lloyds and RBS.

Chief executive David Duffy has said the enlarged group is the “first true national competitor to the status quo in UK banking” and aims to provide customers with the best service in the UK.

Issues investors and customers will be keen to find out more on include the detailed timescale for the three-year phasing out of the Clydesdale and Yorkshire bank high street brands as part of the deal.

Cybgisalsoexpectedtoconfirm the ending of a partnership deal between Virgin Money and a technology company run by former Barclays chief executive Antony Jenkins. Jenkin’s fintech 10X Banking was to create a digital platform for Virgin but CYBG has developed its own.

The combined group has more than six million customers, some £84bn of assets and £70bn of customer loans, including £58bn of mortgages – double the size of any other challenger bank.

In CYBG’S latest update in July, the group reiterated an earlier warning that mortgage growth this year is expected to be at the lower end of its guidance range amid fierce competition in the market.

In the third quarter tradbanking ing update it said it saw lower mortgage drawdowns in the period following an earlier drop in application levels due to administration delays after a move to bring processing back onshore in late 2017.

Although it expects volumes in the fourth quarter to recover, it said full-year mortgage growth is still expected to be at the lower end of guidance.

The company added that the mortgage market remains extremely competitive with continued pricing pressure.

The group will also update on PPI complaint volumes which it said remained “elevated” when it last reported. It has said it expects a slow-down in complaint volumes going into next year following the introduction of a fee cap and limits to cold-calling for claims management companies.

Following the completion of the Virgin Money deal, a number of senior personnel changes have taken place.

These include the departure of Virgin Money chairwoman Irene Dorner and chief executive Jayne-anne Gadhia, though Gadhia has agreed to work as a senior adviser to Duffy over the next 18 months.