YORKSHIRE and Clydesdale Banks reported a return to the black and “good progress” with the strategic review announced last April.
The banks said they are over 70 per cent of the way through the planned 1,400 redundancies due to be made by September 2015
The pair made pre-tax earnings of £54m in the six months to March 31, up £92m on last year’s £38m half year loss.
But average gross loans and acceptances fell by £6.3bn to £27.4bn and there was a £7.4bn reduction in average business lending balances.
David Thorburn, chief executive, said: “Our strategy to become a stronger and more competitive business is proving to be the right one and, while there is more work to be done, there has already been a significant transformation of our business.”
The banks transferred £5.6bn of commercial real estate assets to their parent company National Australia Bank last October.
Mr Thorburn said this step helped deliver a £191m improvement in the banks’ bad and doubtful debt charge which fell to £91m.
“Simplifying our business model to concentrate on our traditional strengths, we have successfully reshaped the geography, risk appetite and the composition of business banking. Our support for mortgage customers has also continued with over nine per cent growth in average mortgage lending balances.
“While conditions remain challenging, we are in good shape for the future as a strong customer-focused bank for the communities in which we operate. This is underpinned by a smaller and stronger balance sheet, with a significantly improved funding and capital position.
NAB’s chief executive Cameron Clyne, who has previously said he would not engage in a “desperate fire sale” of the UK business, said the bank’s strategic review of the UK business is ahead of plan.
Australian investors and analysts are keen for NAB to dispose of the UK business.
OptionsXpress analyst Ben Le Brun said: “We certainly want a bit more clarity around the long-term plan for NAB on the UK assets.
“The market would love to see an exit strategy.”