Clydesdale and Yorkshire Banks - Half Year Results 2010

6th May 2010

STRONG PLATFORM FOR FUTURE GROWTH

London, 6 May 2010: National Australia Bank Group, owner of the Clydesdale and Yorkshire Banks, today released full year results for its UK Banking’s⁽¹⁾ operations for the six months to 31 March 2010. Unless otherwise stated, figures are comparisons with the six months to 31 March 2009. Highlights are:

Financial Performance

• Underlying profit up 11% to £264 million
• Pre-tax cash earnings⁽²⁾ grew 17% to £81 million
• Retail deposits and longer term funding cover 105.5% of lending
• Strong liquidity with liquid assets of £10 billion – more than doubled in two years

Customer Support

• On track to deliver £10 billion new business and mortgage lending by Oct 2011
• £2.2 billion of new business and mortgage lending in the past 6 months
• Average gross loans and acceptances stable at £33 billion
• Average retail deposit volumes up 12% to £22.5 billion – double the industry average

Performance Measures

• Provisions coverage ratio strengthens to 1.40%
• Charge for bad & doubtful debts up by 9% (£15m); down 28% (£70m) on Sept 2009 half
• Mortgage balances three months in arrears significantly below UK industry average
• Cost income ratio improves to 57.2% (from 57.8%)
• Net interest margin improves to 2.40% (from 2.14%)

Lynne Peacock, Chief Executive, said:

“As these results clearly demonstrate, our consistent strategic direction continued to keep our business and reputation strong during the toughest trading conditions in post-war memory.

“While there are now consistent signs of economic recovery, our cautious approach will remain until longer term trends are evident. Our clear focus remains on maintaining our strong capital position and supporting customers.

“Having remained profitable and open for business throughout the market turmoil, pre-tax cash earnings grew by over 17% with underlying profits up more than 11% to £264 million. Despite intense competition, average deposits are up almost 12% to £22.5 billion. These figures underline the durability of our business and the strength of our UK brands.

“Built on robust foundations, our UK operations are very well positioned to capitalise on future growth opportunities. It is clearly an exciting time in the market and we will continue to play to our strengths in driving shareholder value and supporting the communities in which we operate.”

Download Half Year Results (PDF, opens in new window)