NAB set to hit lending targets

YORKSHIRE Bank owner National Australia Bank today said its UK operations were on course to hit new lending targets despite the economic climate.

NAB’s Yorkshire Bank and Clydesdale Bank continued to “perform well” in the second quarter of 2010, the group said this morning in a trading update.

NAB said the banks remained on track to deliver £10bn of gross new lending to businesses and mortgage customers by October 2011.

Clydesdale & Yorkshire Banks’ chief executive Lynne Peacock said: “We continue to follow a very steady and prudent course. While the signs of economic recovery remain encouraging, our strategic direction is unchanged.

“Firmly focused on growing our existing business, we remain committed to supporting our existing customers and are on track to deliver £10bn of gross new lending by October next year.”

NAB said although credit demand was “subdued”, business confidence was showing some signs of improvement and deposit growth remains strong.

It said caution was the watchword for economic recovery as the effects of June’s emergency budget are still taken in and worries remain about the financial positions of European banks.

NAB’s UK region consists of banking and wealth management activities in the UK operating under the Clydesdale Bank and  Yorkshire Bank brands. It does not include NAB’s wholesale banking operations in the UK.

Yorkshire Bank and Clydesdale Bank, which reported underlying half-year profits of £264m in May, has hit the headlines in recent weeks after a number of mortgage customers were told they were making lower repayments than they should have been because of miscalculations at the banks and would have to pay hefty sums in some cases to make up the shortfall.

NAB’s unaudited cash earnings for second quarter were approximately $1.1 bn (£635m), in line with its quarterly average of the first half of the 2010 financial year.