The impact on profit margins amid fierce competition in the mortgage market will come under scrutiny this week when Clydesdale Bank owner CYBG reports first-half results.
Rivals including RBS and Santander have recently flagged tough conditions in mortgage lending although when Glasgow-based CYBG last updated the market in February it said a fall in overall profit margins this year will not be as bad as previously feared.
Progress on its integration of Virgin Money will also be in the spotlight with the group expected to report that cost savings from the bumper £1.7 billion deal are continuing to come in higher than predicted and are expected to be running at £150m a year by 2021.
CYBG will face questions on branch closures after it announced that Clydesdale branches in Arbroath, Brora, Largs, Shettleston and St Andrews are to shut from August onwards. The closures are part of wider CYBG branch downsizing which will see a further six branches in the north of England and Midlands close.
Last week legal action was launched against Clydesdale Bank and its former owner National Australia Bank in connection with the alleged mis-selling of tailored business loans. A CYBG spokesman said the group action claim would be defended “in the strongest terms possible”.
Last month analysts at Investec Securities cut their rating on CYBG shares to “hold” from “buy”. Although they said that they believed CYBG offers “further upside potential for the patient investor”, they also said they saw better value elsewhere in the banking sector.