Lending to smaller firms pays off for Yorkshire Bank

YORKSHIRE Bank owner National Australia Bank’s UK operations saw pre-tax profits increase by 25% to £101m in its first half as it said SMEs were finding its services popular.

NAB said in the six months to March 31, Yorkshire Bank and Clydesdale Bank saw cash earnings rise 26% to £77m, while they generated £3.3bn of new business and mortgage lending in the period.

Yorkshire Bank’s outgoing chief executive Lynne Peacock said: “The effectiveness of our support for customers and the sensible, consistent strategic direction we have maintained is clearly demonstrated in these creditable results.

“Pre-tax cash earnings are up 25% in the past six months continuing the substantial recovery in profitability achieved last year.

“Maintaining our sound capital position and balancing profit with increased security, a key focus has been to support our customers and this has been central to our success in these uncertain economic times.

“Despite subdued market demand for credit, we continue to offer genuine customer choice in the market. This is attracting growing numbers of small and mid-corporate trading businesses and helping us to further expand our mortgage book.

“We are well on track to deliver our two-year new lending commitment of £10bn by October.”

Reflecting on her tenure as chief executive, Ms Peacock said: “As I prepare to pass the baton to David Thorburn and a very strong UK management team, I am proud to reflect on what we have achieved in transforming this business over the past seven years.

“While national economic recovery will continue to provide challenges, we have kept Clydesdale and Yorkshire Banks safe, strong and very well placed to capitalise on future growth opportunities.”

NAB said the two banks had advanced £8bn of new lending over the past 18 months and had liquid assets of £9.8bn.