Yorkshire Bank pledges £10bn in new lending

YORKSHIRE and Clydesdale banks have pledged £10bn in new lending over the next two years to help support business and mortgage customers, it was revealed today.

The banks, which are owned by National Australia Bank, also reported a strong performance in “exceptionally poor market” conditions.

Pre-tax profits of £108m were made in the year ended September 30 compared to £343m in the year to September 2008.

Underlying profit before tax was £529m – up 2% from £518m the year before.

During a period in which lenders have been criticised for low lending volumes the banks can boast £4.1bn in new lending including new business lending of £2bn and new mortgage lending of £1.8bn.

Average gross loans and acceptances increased by £2.1bn (7%) to £33.5bn. Business lending was up around 10% and mortgage lending by more than 4%.

An extra £2.6bn of deposits was attracted in the period – almost four times the UK industry average.

The banks also report a net increase of more than 50,000 customers (up 2%) in the year, which was achieved as a result of continued retention and increased acquisition rates.

Lynne Peacock, chief executive, said: “We’ve kept our business safe, secure and in the best possible shape by maintaining a strong capital position and supporting our customers in these challenging times. We’re now moving up a gear.

“Today we are pledging £10bn of new lending to support business and mortgage customers over the next two years. Our pledge of additional funding is a considerable commitment for a business of our size. It will help to ensure customers continue to have real choice in a consolidating market and are supported when they need it most.”

Ms Peacock said that the banks’ prudent approach during the boom years had given it stability. Neither of the banks offered sub-prime or self-certified borrowing.

Repossession rates are the lowest in the industry – just 84 in the 12 months since September 2008 compared to in excess 24,000 repossessions for the UK banking industry in the first six months of 2009.

For small and mid-corporate businesses facing financial difficulty, dedicated support is provided by the Business Recovery Unit. The ‘intensive care’ unit works to help businesses back to full health.

A statement said that the business had undergone significant transformation over the past five years and was in good shape.

“A consistent strategic management approach, coupled with the creditable level headed approach of its employees at a time when others were distracted, has ensured the business is well placed to take advantage of future growth opportunities,” it said.

Back in July, National Australia Bank (NAB) confirmed that it had successfully raised £1bn through a share placing to strengthen its balance sheet.

More recently, NAB alongside Lloyds Banking Group announced a deal saving more than a 1,000 jobs at Halifax-based building products group Heywood Williams.

The deal saw the banks take an 80% stake in the new private company in returning for writing off £21m of debt while the management will have 10% and the remaining 10% of shares will be held in an employee benefit trust.

Meanwhile, Clydesdale and Yorkshire Bank has announced that Paul Shephard will be the new head of its corporate and structured finance division.

Mr Shephard, who is currently regional director for the North West and Midlands, will replace Richard Kennerley.