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Duffy hails bank's performance

Maiden dividend as CYBG sees profits boost

David Duffy

David Duffy: only true challenger bank

Clydesdale Bank owner CYBG has recorded its first statutory profit in more than five years and is recommending an inaugural dividend to shareholders.

Statutory profit after tax came in at £182m including restructuring and conduct charges against a £164m loss last time. Pre-tax statutory profit rose from £77m to £268m.

The board is recommending a maiden dividend of 1p per share.

Chief executive David Duffy said it has delivered ahead of market growth in both mortgages and SME lending and remains on track to deliver its commitment to provide up to £6 billion of lending to SMEs by the end of 2019.

“Our results show improved underlying profit, sustainable loan growth, a stable margin and improved returns – all achieved in a highly competitive market and a continuing low growth, low interest rate environment,” said Mr Duffy in its annual results statement.

“Our cost efficiency programme is also ahead of plan, with underlying operating costs coming in at £675 million, down 7% year on year.

“We have also continued to work through our legacy conduct issues and our statutory profit includes the impact of a conduct charge of £58m primarily due to historical payment protection insurance (PPI) mis-selling.”

Mr Duffy said  CYBG  is “the only truly full-service challenger bank of scale” across both retail and the SME sector in the UK market.

“CYBG is perfectly placed to disrupt the market – we  have the size and full-service retail and SME capabilities that no other UK challenger bank can offer, yet we are smaller and more agile than the complex structures of the ‘big five’ UK banks.

“We are well capitalised, have a high-quality loan book and prudent risk appetite, along with powerful, established local brands. These have now been joined by an innovative brand in B, which has broadened our customer demographic and reach outside of our core regions. We have over 100,000 B customers since launch in 2016.”



Underlying income up 3% and costs down 7%, delivering a 7%pts improvement in underlying CIR to 67%


Stable net interest margin of 2.27% in a competitive environment


Underlying profit before tax up 33% to £293m


First statutory profit after tax in over five years of £182m including restructuring and conduct charges


Significantly improved returns: underlying RoTE 7.5% (FY16: 5.2%)


CET1 ratio of 12.4% comfortably within 12-13% operating range; IRB accreditation on track


Recommending payment of an inaugural dividend of 1p per share


FY18 guidance for NIM of c.220bps and underlying costs <£650m; medium-term guidance reiterated


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