Clydesdale owner backs turnaround
The lenders swung out of the red with combined pre-tax profits of £54 million in the six months to March 31 against losses of £38 million a year earlier after bad debt charges slid by £191 million to £92 million.
%VIRTUAL-SkimlinksPromo%The turnaround followed the transfer of a £5.6 billion commercial real estate loan book to owner National Australia Bank (NAB) last October.
NAB is overhauling its UK banking division and slashing jobs following hefty losses in recent years as it has counted the cost of falling property prices and loans turned sour.
It announced plans last year to axe around 1,400 jobs by September 2015 and has already cut around 1,000 roles under the strategic review, which will focus the two businesses on retail operations and business lending in their heartlands of Scotland and the north of England.
NAB said the UK restructure was "ahead of plan".
David Thorburn, chief executive of NAB's Clydesdale and Yorkshire division, added: "While there is more work to be done, there has already been a significant transformation of our business."
Savings from the shake-up were offset by cash set aside for customer redress, including claims relating to mis-selling of interest rate swaps to small businesses, although NAB declined to provide a figure.
The banks saw a £1.3 billion or 9.1% increase in mortgage lending over the first half, but business lending slumped by £7.4 billion partly as a result of the commercial real estate transfer and as lending to small firms dropped. Average customer retail deposits fell 0.4% to £25 billion in a "highly competitive" savings market, the group said.
The wider Melbourne-based NAB group reported a 3.1% rise in first half underlying earnings to 2.9 million Australian dollars (£1.9 billion).