Profits up as cost cutting continues at Clydesdale

The Glasgow-based group which owns Clydesdale Bank has enjoyed a “significantly improved financial performance” during the first half of its financial year as underlying profits increased.

CYBG, which also owns Yorkshire Bank, also said it had continued to cut costs as it works towards a target of more than £100m of savings by 2019 as it released its half year results to 31 March 2017.

The bank’s underlying profit before tax increased by 15 per cent to £123 million, £16 million higher than the period to March 2016, and Underlying costs for the period were £348 million, a reduction of £28 million.

Mortgage growth of 5 per cent was ahead of market trends.

Statutory profit before tax was £46m, down from £58m a year ago, after deduction of restructuring and charges for legacy conduct matters.

The bank said the customer shift to online banking continued at pace with use of its ‘B’ digital banking service doubling in the first half of the year.

Jim Pettigrew, chairman of CYBG, said: “CYBG has had a good start to 2017, building on the momentum created in our first year as an independent business.

“We remain focused on our strategy to leverage our digital capabilities and scalable infrastructure to support our growth ambitions and deliver a superior customer experience.

“The group’s financial performance has been good in the first half of the year and we continue to target a modest inaugural dividend in respect of 2017.”

Chief executive David Duffy added that in the first half of this year, the bank has maintained momentum in delivering its strategic priorities and commitments, and as a result are delivering significantly improved financial performance.

“Our half year results show improved underlying profit, good loan growth, stable margin, continued delivery of our cost programme and improved returns - all delivered in a highly competitive market and continuing low growth, low interest rate environment,” he said.

“As the only true full service challenger bank of scale across both retail and SME in the UK market, we have been able to deliver ahead of market growth in mortgages and growth in core SME banking, as well as making a strong start to our commitment to provide up to £6bn of lending to SMEs over the next three years.”