CYBG reports lower new business volumes in Q3’s ‘subdued market’

CYBG, the listed owners of Leeds-headquartered Yorkshire Bank, has seen lower new business volumes and a mortgage book reduction in the third quarter of its financial year; but is positive about the progress of its Virgin Money integration.

Issuing an update on trading in the nine months to 30 June 2019, CYBG said that it was in line with the Board’s expectations and good progress continued to be made with the Virgin Money integration programme.

The firm noted a Q3 mortgage book reduction of 0.2% to £60.4bn, which it said was “due to higher redemptions in the period and lower new business volumes in line with the Group’s optimisation strategy.”

In addition, its Q3 business lending growth stood at 0.5%, to £7.7bn. CYBG added this was due to “lower new business volumes in a subdued market, but with a strong Q4 pipeline of new lending.”

Its personal lending division grew  5.7% to £4.8bn, primarily due to strong credit card growth and customer deposits grew 1.8% in Q3 to £62.8bn.

CYBG added that PPI complaint costs were “broadly in line with provision assumptions” but confirmed that “the Group, in line with the rest of the industry, has seen a recent increase in PPI information requests.”

David Duffy, Chief Executive Officer of CYBG said: “The Group continues to deliver on its targets with another quarter of resilient performance including disciplined lending and deposit growth in line with our recently announced strategy.

“Our net interest margin is tracking as expected and we delivered further cost efficiencies in the period – even with the twin pressures of Brexit and the highly competitive mortgage market, we remain on track to deliver full year performance in line with our guidance.

“At our Capital Markets Day in June we set out our plans to disrupt the status quo with new propositions, as well as updated financial, customer service and market share targets. Our ongoing performance and refreshed strategy under the Virgin Money brand underlines the opportunity we have to create a new force in consumer and business banking.”

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