FTSE 250-listed lender CYBG PLC on Wednesday reported a “resilient” interim performance amid its Virgin Money integration “progressing well”.
CYBG, which operates the Clydesdale Bank and Yorkshire Bank brands and recently bought rival Virgin Money, saw its income and profit rise sharply in six months to March 31 thanks to that acquisition.
The lender swung to a statutory pretax profit in the first half of GBP42 million from a GBP95 million loss the year before. CYBG’s net interest income almost doubled, rising to GBP820 million from GBP426 million the year before.
More pleasingly, it said, was the lender’s underlying performance. On a pro forma basis – assuming Virgin Money and CYBG had always been a combined group – net interest income was down 1.4% to GBP728 million but operating income was up marginally to GBP843 million.
“I am pleased with our first six months as a combined business which has seen both clear progress in our integration programme and the delivery of a resilient underlying financial performance in challenging market conditions. With a strong platform on which to build, we now look forward to our Capital Markets Day in June where we will lay out our group strategy as the first true national competitor to the status quo,” said Chief Executive David Duffy.
The decrease in underlying net interest income was attributed to a lower net interest margin, which slipped to 1.71% versus 1.84% in the first half of financial 2018 and 1.72% in the second half of the previous financial year.
CYBG said mortgage pricing pressures pushed its margins lower.