Yorkshire Bank group delivers first profits in five years
Yorkshire Bank’s parent, the Clydesdale and Yorkshire Banking Group (CYBG), has recorded its first statutory profit in more than five years as it pushes ahead with its three-year mission to build the UK’s “leading digitally enabled challenger bank.”
CYBG, which today recommended an inaugural dividend to shareholders, separated from the National Australia Bank in February 2016 and since then it has focused on delivery of its omni-channel services, with plans to invest £350m over a two-year period.
The bank has been on a three-year mission to become a leading challenger bank, and to “disrupt” the market for SME and retail customers.
David Duffy, chief executive, said: “We have delivered a strong performance in 2017 having met all of our targets and recorded our first statutory profit in over five years. As a result, we are pleased to be recommending an inaugural dividend to our shareholders. This is a good first step in our three-year plan and we remain fully focused on the delivery of our medium-term targets, which factor in our cautious view of the economic outlook.
“We continue to leverage our unique focus in Scotland and the North of England, with our powerful Clydesdale and Yorkshire Bank footprint delivering ahead of market growth in both SME and mortgages. Our new digital brand, B, is proving highly successful in attracting new customers nationally, with over 100,000 accounts opened since launch.”
For the year ended 30 September 2017, the group reported a 33% rise in underlying profit before tax of £293m and its first statutory profit after tax in over five years of £182m including restructuring and conduct charges (2016: loss of £164m), prompting the group to recommend the payment of an inaugural dividend of 1p per share.
CYBG reported total lending growth of 6%, with mortgages up 8% to £23.5bn driven by enhancements to its customer and channel experience.
Core SME lending was up 6% to £6.8bn following the “continued reinvigoration” of its SME franchise, which included the launch of an online SME lending facility.
Investment in technology is a major driver for the group, which has outlined its intention to become the “number one bank” across retail and SME banking.
The bank said that one of ways it was seeking to achieve that aim was through Yorkshire Bank’s ‘B brand’. The product is a current account and instant savings account that is managed through an app, which in September also became a concept store.
Last month it opened the doors on the first B store in Birmingham city centre, having trialled the ideas and technology since April in its Studio B format on Kensington High Street in London.
CYBG said: “Whether it is prototyping new technologies, opening our first consumer innovation lab, Studio B, or collaborating with Fintech partners with the development of our new small business e-lending solution, we are building a bank focused on a differentiated customer experience that will put customers more in control of their money.”
The bank said its cost efficiency programme is ahead of plan, with underlying operating costs coming in at £675m, down 7% year on year. It said it has also continued to work through its legacy conduct issues and that the statutory profit includes the impact of a conduct charge of £58m primarily due to historical payment protection insurance (PPI) mis-selling.
