Clydesdale Bank owner CYBG stressed its “resilient” start to the year despite coming under pressure from intense competition and a sluggish economy, with revenues and bad debt levels both worsening.
Total revenues in the six months to March were flat year on year after accounting for last year’s acquisition of Virgin Money, at £843m. Lower margins on its mortgage book were offset by an increase in non-interest income from credit card fees.
Underlying impairment losses jumped from £48m to £77m. The increase was driven in part by accounting changes, but was also affected by an uptick in bad loans among its business and credit card customers.
Despite the pressures, however, shares in the group climbed as much as 9 per cent in early trading before moderating to a 2 per cent rise, with analysts remarking that the declines were not as bad as expected.
Ian Smith, CYBG chief financial officer, said investors were “relieved to see the business was working” after weak results from peers added to uncertainty in the wake of the Virgin deal.