The owner of Clydesdale Bank yesterday signalled another 50 branches will close as part of a newly-unveiled £100 million cost-cutting drive to help it post better financial returns faster.
Clydesdale and its sister group Yorkshire Bank said the cost cutting and an investment of £350m over the next two years in an “omni-channel” customer offering meant it anticipated double-digit return on equity by financial year 2019 – a year ahead of its previous schedule.
CYBG, owner of the brands, floated on the stock market in February and chief executive David Duffy told a capital markets day in London that he is targeting a cost income ratio of 55-58 per cent by FY20 – down from 60 per cent previously.
He said most “efficiencies” would come from central cost management, including an unspecified level of redundancies from “de-layering” of the staffing structure. However, he hoped the bulk of any headcount reduction could be achieved through natural turnover.
Glasgow-based CYBG said it will cut its branch network from 248 to less than 200 over the next three years, after recently announcing plans to shut 26 branches by the end of September. It is not yet known which locations will be affected by the latest cuts.
The bank was now targeting “mid-single digit growth” in mortgage loans, a key Clydesdale business, down from a previous target of 8 per cent as the economy faced headwinds, Duffy said.
He added that the group was being “ultra cautious” in assuming only zero UK interest rates through to 2019 as the backcloth for the more ambitious financial targets.