Clydesdale bucks the 'bank crisis' trend

Published on Saturday 10 November 2007 00:34

NATIONAL Australia Bank's UK operations, Clydesdale Bank and Yorkshire Bank, yesterday sidestepped the sub-prime crisis engulfing the sector to unveil a 16 per cent rise in pre-tax profits to £379 million.

Lynne Peacock, chief executive of NAB UK, said: "These results demonstrate our UK business is continuing to deliver strong and sustainable growth during turbulent market conditions."

The business took a 23m hit from higher wholesale funding costs, nearly double the figure of the previous year.

Peacock said Clydesdale and Yorkshire had no direct exposure to risky credit mortgages.

She said the average Council of Mortgage Lenders' figures for bank customers 90 days in arrears with payments was 1.06 per cent "whereas ours is 0.46 per cent, less than half".

Peacock added: "The turbulence in the markets has affected the cost of wholesale funding and we cannot be immune from that." She added that over a third of the extra cost was in the last two months of NAB UK's trading year to end-September, when the credit crunch bit.

Average gross loans increased 19.4 per cent to 24.6 billion in the year, with business lending up 25 per cent and mortgage lending volumes up 19 per cent. Average retail deposit balances were up 21 per cent at 15.6bn.

National Australia Bank, run by Scot John Stewart, earlier posted a 17 per cent jump in annual profits to A$4.4bn (1.92bn).

• Clydesdale Bank was the first corporate sponsor of Glasgow's Commonwealth Games 2014 bid. Steve Reid, retail banking director, said : "Clydesdale Bank is delighted that Glasgow has won. I believe that the enthusiasm and support from the Scottish public played a major role in securing the bid."