Clydesdale Bank sees 53% profit rise before flotation

Clydesdale Bank has reported a 53% jump in first-half pre-tax profit benefitting from a one-off gain from capital restructuring and lower impairment losses on credit exposures.

Sat, 16 May, 2015 - 01:00

Geoff Percival

Outgoing AIB head David Duffy is shortly set to join the British lender as CEO.

Glasgow-based Clydesdale is the UK retail and commercial banking arm of National Australia Bank and is expected to go public in London this year. It said it was seeing encouraging growth in current account switchers.

“Our presence, in and commitment to, core regional markets among SMEs means that we are well placed to compete as demand for credit returns,” chief executive Debbie Crosbie said in a statement.

Pre-tax profit rose to £133m (€184m) for the six months ended March 31, from £87m a year earlier. Net interest income rose 1.7% to £390m, buoyed by higher income from home lending and deposit costs. The bank had a one-off gain of £39m from the repurchase of subordinated debt as part of a capital restructuring in December last year.

Ms Crosbie told Reuters last week that an initial public offering of Clydesdale Bank was National Australia Bank’s preferred option, but it may still consider an offer for the whole of the business.

The bank said it would sell 20% to 30% of its British business which includes Clydesdale Bank and Yorkshire Bank, through an initial public offering in London this year. The rest of the shares will go to National Australia Bank shareholders.

Mr Duffy announced his resignation from AIB earlier this year, after three years in the job and leading it back to profitability. His departure date has yet to be set.