Britain’s CYBG Plc, owner of Clydesdale and Yorkshire Bank, swung to a profit in the first half of the year and reported higher lending in a tight U.K. mortgage market on Wednesday, sending its shares up 10 percent.
The company, which last year emerged as Britain’s sixth biggest bank after buying Virgin Money, said it managed to grow its mortgage book despite facing sustained competition and economic uncertainty.
CYBG, however, said mortgage pricing pressure hit its net interest margin. The bank also plans to set aside more provisions for mis-selling of payment protection insurance.
CYBG’s shares were 9.4 percent higher at 209.3 pence at 0714 GMT, pushing them to the top of London’s midcap index.
Consistent loan growth has been seen as a good sign after the bank warned in November that Brexit-related concerns were clouding near-term prospects for homeowners and small businesses, its main customers.
It posted a surprise rise in total loans in February.
CYBG reported a statutory profit before tax of 42 million pounds for the six months ended March 31, compared with a loss of 95 million pounds a year earlier.
The company said the mortgage market has been more stable but hurt by pricing.
“There is obviously more competition … because there is less growth in absolute terms, which is probably related to Brexit uncertainties,” CEO David Duffy told reporters.
Britain’s housing market showed little sign of recovery in April as properties put up for sale fell at the fastest rate since 2016, according to a survey last week – yet another sign of Brexit’s chilling effect on sector.
However, Leeds-based CYBG managed a 2.4% rise in total loans to 72.7 billion pounds.