Clydesdale and Yorkshire banks’ pledge for Midlands businesses

CLYDESDALE and Yorkshire Bank s have pledged to deliver £1bn of mortgage lending to the Midlands by October next year.

The banks, which today announced an 11%  increase in underlying profits for the six months to March, have also pledged to help the region’s business community by setting up a new lending support initiative.

The banks, owned by National Australia Bank Group, saw underlying profits increase to £264m, while pre-tax cash earnings grew 17% to £81m.

The group said it was on track to deliver £10bn of new business and mortgage lending by the autumn of next year – including the £1m pledge to the Midlands.

During the last six months, the banks have brought in £2.2bn of new business and mortgage lending, while average gross loans and acceptances were maintained at £33bn.

Average retail deposit volumes were up 12% to £22.5bn – double the industry average.

The group also reported strong liquidity with liquid assets of £10bn – which have more than doubled in the last two years.
Lynne Peacock, chief executive, Clydesdale and Yorkshire Banks, said the results demonstrated the banks consistent policy to continue strong trading.

“While there are now consistent signs of economic recovery, our sensible and cautious approach will remain until longer term trends are evident,” she said.

“Our clear focus remains on maintaining our strong capital position and supporting customers. These figures underline the durability of our business and the strength of our UK brands.”

She said the banks UK operations were now well positioned to capitalise on future growth opportunities.

“It is clearly an exciting time in the market and we will continue to play to our strengths in driving shareholder value and supporting the communities in which we operate,” she added.

The banks are attempting to woo business customers with the launch of a new package, ‘Investing for Growth’ which promises a more flexible approach to lending.

Benefits such as loan repayment holidays, interest-only repayments and extended loan and credit terms will be offered.

The features are designed to help businesses take advantage of growth opportunities by providing investment finance, increasing cash flow and easing debt commitments.

Customers who take up the package will be able to invest the cash back into their business in the form of expansion, new staff, equipment, machinery and business development.

The business planning and customer support package includes: switching loan repayments to ‘interest only’ for an agreed period rather than ‘capital and interest’ payments; lengthening the term of a loan over a longer time period to reduce payments; offering a ‘payment holiday’ to allow funds for debt servicing to be redirected to investing into the business and fixed-rate business investment loan deals.

Brian Colquhoun, regional director for Clydesdale and Yorkshire Banks in the Midlands, said: “Investing for Growth underlines our commitment to helping UK businesses grow by easing the pressure on their cashflow.

“As business confidence returns, it is important customers are offered choice, flexibility and dedicated support from their bank.”

He said the banks intended to take the lead as the recovery continued and wanted to work with businesses to take advantage of all growth opportunities.

“Following every recession, there comes a point when businesses feel confident enough to start investing again,” he said.

“The challenge for trading businesses is to identify when this point is and what to do about it.  As customer confidence increases, we will be there to support and help develop their business growth plans.”