Clydesdale vows to continue high-level mortgage lending

Published on Tuesday 28 April 2009 10:33

CLYDESDALE BANK today said it is committed to continuing to provide mortgages of up to 95 per cent of a property's value.

The bank said it has increased mortgage lending by four per cent to nearly 12 billion since March 2008 – at a time when the UK market has been drawn in dramatically.

It said that its 95 per cent mortgages – among the highest loan-to-value deals in the UK – are still right for some customers.

The firm said that only customers who receive a one-on-one interview will be given the deal. Factors taken into account include type of employment, length of time in their current job and credit history.

Steve Reid, Clydesdale's director of retail, said: "We are committed to supporting customers in these challenging times. We have always taken responsible lending seriously and have no sub-prime on our books. As a consequence, we do not have the same bad debt on our books as some.

"We have continued to lend to first-time buyers at up to 95 per cent of the value throughout last year and will continue to do so.

"Anything at 90-95 per cent is manually underwritten, it is not systems-driven."

However, he added that the average loan-to-value provided is now 88 per cent because people have begun to realise the importance of having a deposit.

He also admitted that the number of balances in arrears by more than three months has nearly doubled in a year, to 0.71 per cent.

But he said that Clydesdale Bank in Scotland and Yorkshire Bank in England has only repossessed 38 properties.

"We are totally committed to doing whatever we can to help customers stay in their own homes," he said. "We will always look to come up with solutions. It is not a one-size-fits-all approach."

The comments on mortgages came as Clydesdale said overall lending increased by 1.9bn in the six months to the end of March.

Average retail deposits surged by 15 per cent to 20.1bn as it said it benefited from a "flight to safety" by savers as other banks encountered difficulties.

But overall pre-tax profits slid to 70m for the half year, compared to 194m last year.

In Edinburgh, the bank said lending increased by 11 per cent as it remained "committed to the local economy".

Among its key deals was funding to help Laing the Jewellers expand its Frederick Street store and 500,000 of support to Edinburgh-based Perryman's Buses as it attempts to increase passenger numbers to 3000 a day.

Robert Gibson, managing partner of the Edinburgh Financial Solutions Centre, said: "These results clearly demonstrate how our traditional banking approach is helping local businesses to succeed. We are committed to supporting businesses in the towns and cities in which we operate and our clients tell us they like the fact that the money they bank with us goes back into supporting their local economy."