Clydesdale reports sales and lending up

<p>Chief executive praises the “positive results” ahead of next year’s planned flotation.</p>

Clydesdale Bank, which includes Yorkshire Bank, has reported positive results for the year to September.

The company has seen an increase in retail customer savings and lending, although the bank also confirms it has cut back on business lending as it prepares to float on the London and Australian stock markets.

Flotation is scheduled for early February – that's later than originally planned. A quarter of the group will be sold to institutional investors by National Australia Bank (NAB), its parent company.

The remaining 75 per cent of shares will be distributed to the company's existing shareholders.

NAB has also injected £620 million of capital into the Clydesdale group in order to build up its core captal. This brings the ratio up from 9.4 per cent of liabilities to 13.2 per cent.

In addition, the Melbourne-based lender has agreed to set aside £465 million to cover compensation for mis-sold payment protection insurance and mis-sold business loans. In previous years, a total of £1.2 billion has been set aside.

Lending up

Clydesdale, which is based in Glasgow, issued its latest results as part of NAB's full-year figures. Cash earnings were down by £2 million to £156 million, customer lending was up four per cent to £28.7 billion and UK mortgage lending was up 11.2 per cent to £20.5 billion.

David Duffy, Clydesdale's new chief executive, was positive about the results.

He said: "Our balance sheet is robust, with improved asset quality and stronger capital ratios. We are challenging the way we have worked historically, questioning the commercial viability of everything we do and creating more agile working practices."

By focusing on how and what the firm delivers for customers, Clydesdale has created a "strong platform on which to build and exciting future as an independent bank", he explained.

"In doing that, I believe we have the ability to offer our customers an attractive alternative to the status quo of banking in the UK."

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.