Shares of Clydesdale and Yorkshire Bank owner CYBG rose about 5% on Wednesday after it delivered “resilient” results for the six months ended March 31, 2019,
CYBG completed the acquisition of Virgin Money in October 2018.
CYBG’s pro forma underlying profit before tax fell 5% to £286 million year on year “due to the anticipated increase in impairments …”
Total underlying income of £843 million in the first six months was in line with both the first half and second half of 2018.
Customer lending grew 2.4% to £72.7 billion, with mortgage balances growing 2.5% to £60.5 billion.
Customer deposits rose 1.2% to £61.7 billion.
CYBG’s CEO David Duffy said: “I am pleased to report that the group has delivered a resilient underlying financial performance during the first half of the year and our three year integration programme is making good progress.
“As previously announced we have also increased our forecast of the total cost synergies available by £30m to a minimum of £150m by the end of FY 2021.
“We have already realised £33m of annual run-rate cost synergies in the first six months.
“As expected, profit before tax has been impacted by the significant Virgin Money acquisition and integration costs.
“Our number one priority remains offering our customers attractive products and quality service, and we are pleased to have maintained strong Net Promoter Scores for both our B and Virgin Money brands, while our Clydesdale and Yorkshire Bank NPS continue to improve.
“Despite sustained competition in the mortgage market and a continued uncertain economic backdrop, we have delivered solid growth in our mortgage book and we have seen signs that mortgage pricing has started to stabilise.
“In our SME business, we have maintained momentum in the origination of new customer facilities and we are also seeing good growth from our Virgin Atlantic credit card proposition.
“We remain on track to deliver 2019 performance in line with guidance and look forward to updating the market in June on our refreshed strategy and the significant opportunities for our combined business.”