First Clydesdale profit in five years

British lender CYBG, which was spun out of NAB last year, has booked its first post-tax profit in more than five years.

A Clydesdale Bank branch in Edinburgh, Scotland

British lender CYBG, which was spun out of National Australia Bank early last year, has booked its first post-tax profit in more than five years after being swamped by restructuring costs and bad conduct fines.

The bank will also pay an inaugural dividend to shareholders of a penny a share.

The bank, formerly known as Clydesdale and Yorkshire Bank, booked a statutory profit of £182 million ($320m) for the year through September. That was above last year’s statutory loss of £164m.

CYBG had last year announced it would be booking £200m worth of restructuring charges over three years as it looked to cut £100m from the business over two years.

Two years ago the bank was fined by Britain’s Financial Conduct Authority a record £21m for failings in how it handled ­insurance mis-selling claims, ­including providing false information to Britain’s financial ­ombudsman.

NAB agreed to meet 90 per cent of the remediation costs, which blew out to more than £500m this year — CYBG paid an extra £58m in provisions for payment protection insurance remediation this year.

CYBG booked 8 per cent growth in mortgages to £23.5 billion. Small and medium business lending grew 6 per cent to £6.8bn.

CYBG chief financial officer Ian Smith said the Bank of England’s recent rate hike was expected to be the last for the year.

“It was a very modest hike and ­really only took us back to where we were 12 months ago.

“We plan on the basis that we won’t see any further rate rises this year.”

Low rates have hampered profitability of the banking sector in Britain.

After CYBG was spun out of National Australia Bank and listed on both the Australian and London markets, the Australian stock has risen from $4.16 to $5.30.