Jobs to go at Yorkshire Bank as profits dip

AROUND 1,400 jobs are to be cut at Yorkshire and Clydesdale banks.

National Australia Bank Group, owner of Clydesdale and Yorkshire Banks, today said it was simplifying its business model to focus on retail operations and SME business lending across what it described as its Scottish and northern “heartlands”.

Although more than 330 bank branches will remain open, 1,400 jobs are to be shed by September 2015.

The decisions follow a strategic review by NAB earlier this year as it looked to respond to continuing difficult trading conditions.

The two banks are to maintain 44 of their ‘Financial Solution Centres’ – which oversee business lending – but are closing a further 29 and relocating nine.

More than £6bn of commercial property and associated loans are to be transferred to NAB for run-off.

The results of the strategic review were announced this morning as NAB’s UK banking operations posted underlying profits down 3.2% to £244m and a cash earnings loss of £25m over the six months to March 31.

However, the two banks saw mortgage growth of 10.9%, average gross loans and acceptances were up £1.1bn to £33.7bn, and average retail deposit volumes were up £800m to £24.2bn.

David Thorburn, chief executive of Yorkshire and Clydesdale banks, said: “It is clear that we must adapt to the exceptionally challenging economic environment we are operating in. We have had to take some difficult decisions but they are the right decisions for our business.

“To secure a sustainable future we must concentrate on retail and SME banking in our traditional heartlands. While the vast majority of our customers will be unaffected by the changes, unfortunately we do need to streamline the business and lose jobs.

“I don’t underestimate the impact of this on the employees affected, but our half year results clearly demonstrate why we need to act.

“NAB’s support in taking over the run-off of our commercial property portfolio will also underpin a more autonomous funding position. All these changes add up to a stronger and more competitive business and, in the long-term, this can only be in the best interests of our customers and employees alike.”

The charge to provide for bad and doubtful debts was up £131m to £282m over the period and an additional provision of £120m for potential claims relating to PPI will be made.