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Clydesdale and Yorkshire report £70m profit

National Australia Bank says it still has no plans to sell its UK banking subsidiaries Clydesdale and Yorkshire Bank after reporting a £70m profit for the banks for the six months to 31 March 2009.

The banks did £1.9bn of new business and mortgage lending in the six months to 31 March 2009, with the average gross loans and acceptances increasing by 9.5% to £33.5bn.

While the average retail deposit volumes were up 15% to £20.1bn, almost five times the industry average, while mortgage balances three months in arrears are 40% of the UK industry average.

The banks saw an underlying profit of £238m, while retail deposits and longer term funding covered 97.2% of lending.

There were rumours that NAB was looking to offload its UK banking subsidiaries, but the bank issued a trading update last month in which its chief executive officer Cameron Clyne, confirmed that it was not in the interest of shareholders to exit its UK position.

Lynne Peacock, chief executive, NAG UK, says is strategy remains unchanged.

She says: “We have an enduring commitment to supporting our customers in these challenging times.

“Almost £2bn of new lending has been advanced to business and mortgage customers at a time when they have needed it most. Business lending was up over 14% and mortgage lending has grown by over 4% demonstrating our ongoing support for the communities in which we operate.

“Our strategy remains unchanged. We continue to drive ever-greater efficiency from our operations and have elected to maintain a very conservative liquidity and capital position.

“While this has had an inevitable effect on bank profit, the compelling security and strength of our brands has attracted an extra £2.6 billion of deposits compared with the prior corresponding period.

“This is a creditable performance from a good bank in exceptionally poor market conditions.

“We continue to be ahead of peers on most key indicators with a strong underlying business that remains profitable, despite the impact of the trading environment all UK banks operate in.

“We remain in the best possible shape and are well positioned to fully capitalise on future growth opportunities.”

Overall National Australia Bank generated cash earnings of A$2,027m for the March 2009 half year, a decrease of 9.4% over the March 2008 half year.

Underlying business performance remains sound, with underlying profit up 17.4% to A$4,744m.


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