Clydesdale chief to bow out with double-digit leap in prof?its

Published on Wednesday 27 April 2011 15:57

THE outgoing head of Clydesdale Bank and Yorkshire Bank will deliver an impressive "swansong" trading performance this week, shrugging off the subdued consumer climate with a robust double-digit jump in profits.

Lynne Peacock, who has led the UK operations of National Australia Bank for seven years, is expected to say the interim results have been driven by healthy mortgage and business lending as well as rising retail deposits.

One City analyst said: "This is set to be a strong swansong from Peacock. It wouldn't surprise me given the performance in recent years if there was not a 15 to 20 per cent rise in profits, at least. NAB UK has steadily ploughed its own furrow as the financial crisis left it all but untouched. It is particularly good given the subdued consumer backdrop."

Profits at the group jumped 53 per cent to 164m at the full-year, but analysts say this scale of advance is unlikely to be maintained because of the UK's economic headwinds.

Despite this, Peacock is set to say Clydesdale and Yorkshire banks remain on track to deliver the 10 billion of lending by next October that the business promised in October 2009.

It is thought that, as well as a good performance in mortgages and small business lending, she will refer to the strides the group has made in mid-corporate lending. In the past six months mid-corporate customers it has picked up include Touch Bionics, the Scottish technology and clinical services business, and Dyson, the vacuum cleaner group.

NAB UK, which reports its results on Thursday, set up a team of more than 100 small business managers and business development managers in its retail branches in mid-February with an expanded SME product range. One banking industry executive said: "It is clear the likes of Clydesdale and Santander believe there is a lot to go for in the small and medium-sized business market."

Peacock, to be succeeded as NAB UK chief executive on 1 July by current executive director UK David Thorburn, is expected to report progress on attracting retail deposits. At the full-year stage last October, she revealed that the group's retail deposits had lifted 11 per cent to 23bn, double the industry average growth.

Taxpayer-backed banks Lloyds and Royal Bank of Scotland update on first-quarter trading on Thursday and Friday respectively. Lloyds tends to provide guidance rather than full figures at the Q1 stage, although it is believed new chief executive Antonio Horta-Osorio will provide more detail than usual as the group continues its return to profitability last year.

It is believed he has ruled out giving details of his new strategy, planned for release in June. However, the Lloyds boss is set to tell the City that he would like to see the evidence on which the Independent Commission on Banking based its interim recommendation that the bank should have to sell off substantially more than the 600 branches ordered by the European Commission.

Royal Bank of Scotland first returned to the black in the first quarter of last year, a 715m operating profit replacing a 179m loss. That trend is expected to have continued in the first three months of this year, although chief executive Stephen Hester will say the Irish property market remains choppy.