Clydesdale cashes in as savers seek safety

Published on Saturday 25 April 2009 15:27

CLYDESDALE Bank is expected this week to announce a sharp increase in deposits as savers continue to seek safe homes for their money.

The bank was already on target to show a 5% jump in the value of savings deposited in the first quarter, but sources now predict a 10%-plus rise in deposits over the first half as it benefits from savers switching from other institutions.

Interim results on Tuesday are also likely to show that the bank has significantly increased its new lending to companies in a sign that the banks are beginning to ease restrictions.

However, pre-tax profits are expected to be down as the bank shares the effects of the downturn. While mortgage lending arrears are likely to have risen, they will be below the industry average of 1.88% of all loans.

Despite continued speculation to the contrary, parent company the National Australia Group, which also announces results on Tuesday, will confirm its commitment to retaining the Clydesdale and Yorkshire banks.

UK chief executive Lynne Peacock is expected to say that trading conditions have deteriorated slightly since the update in February. But she will stress that Clydesdale and Yorkshire banks are showing resilience and that underlying profits remain strong.

NAB group chief executive Cameron Clyne will unveil his first figures since succeeding John Stewart.