Yorkshire Bank to invest in growth after profits rise

YORKSHIRE Bank owner National Australia Bank today said its UK operations saw underlying half-year profits rise 11% to £264m as it unveiled a new package of business banking measures to help its customers invest for growth.

NAB’s Yorkshire Bank and Clydesdale Bank saw pre-tax cash earnings grow by 17% to £81m in the six months to March 31 and said that despite “subdued”  market demand for credit, they had completed £2.2bn of new business and mortgage lending in the past six months.

Yorkshire Bank said that its new package for business customers would provide flexibility to help them free-up cashflow so that they can use it more effectively to grow their business.

Its ‘Investing for Growth’ measures for both new and existing customers include:

• 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
• Fixed-rate business investment loan deals

Richard Norrington, regional director for Clydesdale & Yorkshire Banks in Yorkshire, 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. ‘Investing for Growth’ will allow them to take advantage of development opportunities as well as helping them plan for a sustainable future. This might include taking on new staff, introducing new products, or expanding premises enabling them to benefit from any future upturn in their markets.”

In addition, Clydesdale and Yorkshire Banks have also promised to help new customers switch banking provider by offering support including legal or advisory costs.

Mr Norrington added: “We are being bold and taking a leading position to help UK businesses grow.  Following every recession, there comes a point when businesses feel confident enough to start investing again. 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.”

“Clydesdale and Yorkshire Banks’ doors have remained open for business throughout the economic downturn and, having listened to our customers, we feel the time is right to offer a further package of support.”

Clydesdale & Yorkshire Banks’ Chief Executive Lynne Peacock, said: “As these results clearly demonstrate, our consistent strategic direction continued to keep our business and reputation strong during the toughest trading conditions in post-war memory.

“While there are now consistent signs of economic recovery, our sensible and cautious approach will remain until longer term trends are evident. Our clear focus remains on maintaining our strong capital position and supporting customers.

“Having remained profitable and open for business throughout the market turmoil, pre-tax cash earnings grew by over 17% with underlying profits up more than 11% to £264mn. Despite intense competition, deposits are up almost 12% to £22.5bn. These figures underline the durability of our business and the strength of our UK brands.

“Built on robust foundations, our UK operations are very 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.”