The group, formerly known as CYBG, the owner of the historic Clydesdale and Yorkshire bank names, has revised its strategy to switch more rapidly to digital banking services, though the transformation will involve hefty costs.
It said it aimed to save some £175m over the next three years, but restructuring costs incurred over the period would hit £275m to achieve this - far higher than analysts had been expecting.
The group said the additional cost savings would include cutting branches and offices and embedding remote working over time, but provided no further details.
The lender said the number of customers using bank branches for day-to-day transactions had been on a “downward trajectory” for a number of years, and this has been further accelerated by the pandemic.
In addition to the closures in Scotland, a further 18 branches will be closing across the UK.
Outlining the bank’s accelerated strategy, chief executive David Duffy said: “Following our decision to accelerate the next stage of our ‘Digital First’ strategy, we are today announcing our medium-term growth, investment and efficiency targets, as well as details on [full-year 2021] performance.
“We performed very strongly in FY21, with an expected return to statutory profit before tax underpinned by significant underlying profit growth. We increased our net interest margin, reduced costs, improved impairments and delivered a strong capital progression which enabled the proposed reinstatement of a dividend.”
The group said it expected to report pre-tax profits of £417 million for the year to the end of September, compared to a £168m loss a year earlier.
Gary Greenwood, banking analyst at brokerage Shore Capital, noted: “The results themselves show profit to be comfortably ahead of consensus, primarily due to larger-than-expected provision releases, while capital is stronger than expected and the group has also recommenced dividends with a modest final payment proposed (slightly earlier than we expected).”