Clydesdale Bank owner hails solid progress

Chief executive David Duffy with a new-style Clydesdale banknote. Picture: Robert Perry
Chief executive David Duffy with a new-style Clydesdale banknote. Picture: Robert Perry
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CYBG, the parent company behind the Clydesdale Bank and Yorkshire Bank, today said it had seen “increased momentum” in its mortgage and small business lending businesses.

In a quarterly trading update, the group said mortgages had grown 5.8 per cent on an annualised basis in the nine months to end-June, with record volumes of applications in Q3. Mortgage balances stood at £22.8 billion at the end of the period.

Clydesdale said core lending for smaller businesses had grown 4.7 per cent on an annualised basis, with a “robust pipeline” supporting the group’s £6bn lending commitment to the sector over three years.

The better divisional performance comes after legal services group RGL Management said last month that it is to bring a claim against the bank on behalf of businesses who bought fixed-rate business loans between 2002 and 2012.

David Duffy, CYBG’s chief executive, said the group’s cost-cutting programme was ahead of schedule, with underlying operating costs for the full year now expected to be under £680 million, ahead of previous guidance of £690m and £700m.

He said the Q3 performance had been “solid” despite a competitive trading backcloth. The new efficiencies figure was “testament to the success of our restructuring programme”, he said.

Duffy added that the “digital transformation” of the group continued apace and customers were already seeing regular service and products improvements from the £350m investment programme.

CYBG’s deposit balances were £26.2bn at 30 June, flat on the previous quarter to March and 4 per cent lower than the start of the year.

The update comes ahead of Royal Bank of Scotland’s interim results this Friday, when the bank is expected by the City to have made an operating profit of about £1bn in the second quarter of 2017.

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