Yorkshire and Clydesdale on track to deliver £10bn of new lending

Yorkshire and Clydesdale Banks are on track to deliver £10bn of new lending to business and mortgage customers by October, its parent National Australia Bank has revealed.

Speaking about Yorkshire and Clydesdale in a Q1 trading update today, NAB says: “The business is on track to deliver its two-year pledge to advance £10bn of gross new lending to businesses and mortgage customers by October 2011.”

But it says the economic outlook in the United Kingdom remains weak with slow recovery expected due in part to the economic impact of the spending cuts announced in October and ongoing financial uncertainty in the Euro-zone.

It says in this context, United Kingdom Banking remains well positioned although subdued demand for credit and low interest rates continue to restrict balance sheet and income growth.

It has seen no significant change in credit quality.  However, the delayed recovery has led to some deterioration in the asset quality ratio of 90+ days past due and gross impaired assets to gross loans and acceptances, which increased to 3.34% from 3.15% at 30 September 2010.

Lynne Peacock, UK chief executive, says:  “Against a background of continued economic uncertainty, our UK business continues to demonstrate its resilience and our prudent strategic direction is unchanged.

“Clydesdale and Yorkshire Banks remain fully committed to supporting new and existing business and personal customers. We are firmly on course to deliver our two-year pledge to advance £10 billion of gross new lending to businesses and mortgage customers by October this year.”

In the three months to December 31, NAB says it made cash earnings of A$1.3 billion (£817m), an 18% on the same period a year earlier.