Clydesdale and Yorkshire Banks Half-Year Results to 31 March 2001

10 May 2001

Clydesdale and Yorkshire Banks today released a consolidated half-year result, announcing profits after tax of £145 million, an increase of 10.7% over the previous corresponding period.

"This has been a solid and encouraging performance," said chief executive Stuart Grimshaw. "We're in good shape and will continue to grow. I've been particularly pleased with the success we're seeing with innovative new products like the Tailored Business Loan and our award-winning Rapid Repay mortgage."

This is the first time that Clydesdale and Yorkshire Banks' figures have been reported in consolidated format.

Common management control and operating processes are being progressively adopted in each region. A Private Bill to consolidate the legal entity structures of the two Great Britain banks is currently before Parliament.

Clydesdale and Yorkshire Banks net interest income increased by £22m (7.5%), driven by 10.8% growth in core lending and 8.8% deposit growth.

Other operating income of Clydesdale and Yorkshire Banks grew by £4m (2.4%), primarily due to increased brokerage and commission fee income from Global Security Services, creditor insurance income and strong sales of interest rate risk management products.

Other operating expenses increased by £4m (1.8%). Increased personnel costs due to merit increases in the trading banks were partly offset by a reduction in full time equivalent employees. Tight cost controls were maintained in Clydesdale and Yorkshire Banks with the cost to income ratio declining from 47.7% to 46.0%.

Bad and doubtful debts increased due to an increased statistical based provision charge as a result of increased lending volumes.

For information on National Australia Bank Group, including a full copy of the Groups half-year results, visit the web-site at http://www.national.com.au/