Clydesdale and Yorkshire Bank owner CYBG said it delivered its first statutory profit before tax in five years with a profit of £77 million in the year to September 30 compared to a loss of £285 million in the previous year.
CYBG — demerged from National Australia Bank early this year — said it achieved a 39% increase in underlying profit before tax of £221 million, up from £159 million.
The Glasgow-based group said it made a statutory loss after tax of £164 million, down from last year’s loss of £229 million, “driven by legislative changes affecting accounting treatment of deferred tax asset.”
CYBG shares fell about 4%.
CYBG said last month it has made a bid for Royal Bank of Scotland’s Williams & Glyn branch network.
The bank said on Tuesday that its engagement with RBS is ongoing though there is no certainty that any transaction will happen.
CYBG chief executive David Duffy said: “In our first year as a Plc, CYBG has delivered on our promises to our customers and shareholders, building strong foundations for our future growth and positive momentum going into 2017.
“Our Annual Results show a strong financial performance, with underlying profit up 39% and the first statutory profit before tax in 5 years through robust growth in mortgages, SME lending and deposits, supported by our ongoing cost reduction programme.
“We are investing in our future, with an investment programme in the next two years of over £350 million in part to unlock the potential of CYBG’s digital platform which will drive improvements in our customer experience and distribution capabilities.
“As the only true full service, challenger bank of scale, we are perfectly placed to disrupt the status quo in the UK banking market.”
Duffy said customer loans grew 4.7% and CYBG’s mortgage book grew 6.5% year on year to £21.8 billion — and owner occupied mortgages accounted for around 60% of new business flows.
The CEO said CYBG’s core SME book, which was £6.3 billion at September 30, grew by 6.1%.
New loans and facilities totalled £2.2 billion this year, an increase of 15% on 2015.
CYBG chairman Jim Pettigrew said: “2016 has been a landmark year in the long history of our bank, as we became independent for the first time since the 1920’s.
“Our ambition is straightforward: to become the credible alternative to the big UK banks.”