Clydesdale Bank revealed another £450 million hit from the payment protection insurance scandal, and said it was slashing costs further after its recent stock market flotation.
The Glasgow-based lender, which spun off from former owner National Australia Bank in February, put by the extra payment protection insurance (PPI) charge as it expects a rush ahead of the deadline for complaints in 2018.
But the group – officially known as CYBG as it also includes Yorkshire Bank – said only £44 million of the additional bill had an impact on its bottom line, thanks to cash that regulators had required National Australia Bank to set aside before the demerger to cover issues such as PPI.
CYBG said it had trimmed costs to £353 million in the first half after announcing plans to axe 26 branches nationwide and cut jobs.
The group said about 150 senior staff would also leave over the next few months, after launching a voluntary redundancy scheme, while it said it would continue to look at ways to reduce costs further.
It added it was on track to see full-year costs of £730 million – “well below” the £762 million previously expected.
The group, which has 274 retail branches and 7,268 staff, reported a 2.5% rise in net interest income to £400 million for the six months ended March 31, while underlying earnings fell 4.2% to £107 million.
It saw customer lending grow 2.8% over the first half, while deposits were up 4.6%.
Mortgage balances rose by 4.9% as it was boosted by “very strong” buy-to-let borrowing ahead of last month’s stamp duty rise.
David Duffy, chief executive of CYBG, said: “I am very pleased to report good progress on all fronts in our first set of results as we execute our strategy as an independent company.”
