Yorkshire Bank group returns to statutory loss
Yorkshire Bank’s parent, the Clydesdale and Yorkshire Banking Group (CYBG), has made a statutory loss of £95m during the first six months of the current financial years as legacy conduct issues marred an improvement in performance.
Reporting on the six months ended 31 March 2018, the bank booked £220m in conduct charges as an exceptional item in the six months to March. This meant that despite a 28% increase in its underlying profits, to £158m, it recorded a statutory pre-tax loss of £95m.
Within the period, CYBG also spent £33m on business restructuring and ‘similar expenses.’ Its overall net income rose 4% to £426m during the period.
This comes after last November reporting figures which saw CYBG deliver its first annual statutory profit in more than five years.
David Duffy, CEO, has said the bank is seeing “strong progress” in delivering its strategy in building a bank for the future which is underpinned by digital transformation.
He said: “In the first half of 2018, we have continued to make good progress in delivering our strategic priorities and developing CYBG as the leading alternative to the UK’s big banks. In a competitive market, we have significantly increased underlying profit, up 28% to £158m, while achieving 5% annualised lending growth across both mortgages and SMEs.”
The bank has seen a growth in mortgage lending – up 6% to £24bn; as well as a growth in SME lending, which was up 5% to £7bn during the period.
Just last month, CYBG announced it was to put a further £350m into its PPI claims budget to close final cases and deal with an expected 110,000 complaints before August 2019. This includes £88m for the costs required to close-out the final cases investigated as part of the Group’s completed remediation programme, £186m for around 110,000 additional customer initiated complaints received before the August 2019 time frame and £76m administration costs.
The bank is looking to still reduce underlying costs. During H1 2018, CYBG’s costs dropped to £323m; down from £327m in 2016 and a large reduction since H2 2016, which saw the bank report £376m in underlying costs.
