Yorkshire Bank agrees new deal for cards

The owner of Yorkshire Bank has signed a new deal to exclusively work with Mastercard, extending its partnership with the payments company.

CYBG, which also owns Clydesdale Bank, will switch all remaining Visa credit cards to Mastercard as part of the partnership.

The seven-year agreement will see all CYBG debit, credit and commercial cards use the Mastercard network.

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Mastercard said the deal represents a significant investment by both parties and demonstrates its commitment to increase the issuance of its cards in the UK.

The renewed partnership will also allow Clydesdale and Yorkshire Bank’s business customers to benefit from enhanced functionality to control and add flexibility to their company’s future spending.

Mark Barnett, divisional president for Mastercard UK and Ireland, said: “CYBG is an exciting and diverse challenger bank, and already a valued Mastercard partner.

“Our renewed agreement will see us issuing even more Mastercard cards in the UK, as well as focusing on security and fraud solutions so that CYBG customers can benefit from some of our newest innovations.”

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The partnership will focus heavily on safety and security, using Mastercard innovations to protect customers against fraud.

Last year, CYBG launched its digital banking service called B. As part of this the bank launched Studio B, a creative, interactive space on Kensington High Street in London.

Mastercard will also be supporting that part of the bank’s business.

Mr Barnett said: “We’re especially excited to support on B – earlier this year we partnered to create a technology showcase within the Clydesdale Bank’s Edinburgh flagship store at the Edinburgh Fringe Festival, and we’ll be bringing it to Studio B in London in 2018.”

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Fergus Murphy, group customer value director at CYBG,
said: “We are delighted to be extending our partnership with Mastercard into a new long-term agreement. This is in line with our continued focus on finding innovative solutions that benefit our customers.”

CYBG demerged from former owner National Australia Bank last year after a turbulent period in the bank’s history.

The transaction resulted in independence for Yorkshire Bank for the first time in nearly 100 years.

Following its IPO, CYBG was established as a challenger bank. Its digital banking platform B has over 100,000 customers.

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Last week the bank said it delivered a 250 per cent surge in annual profits and pledged to broaden the capability which it offers small business customers.

CYBG said pre-tax profits leapt to £268m in the year to September 30 from £77m the previous year, thanks to gains in home loans and lending to small businesses. It added that on a bottom-line basis, it posted its first after-tax profit for more than five years, at £182m against losses of £164m the previous year.

Speaking to The Yorkshire Post, group chief finance officer Ian Smith said that he expected the bank to further collaborate with fintechs but conceded there will be “a bit of come and go” when it comes to its branch network.

“We are really pleased with the results,” he said.

“We can deliver on our promise with a dividend payment. We are slightly above where we expected to be but we are still fairly modest on growth prospects going forward, we think it has to be sustainable rather than heroic.

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“We are firmly committed to SME lending. We are committed to lend £6bn over next three years.”

The group is targeting more than £100m of cost savings by 2019 – a drive which saw the group announce plans in January to shut around a third of its branch network in 2017 and axe 400 jobs.

Global payments network stretching across the world

Mastercard is a global payments technology company, which operates a payments processing network in more than 210 countries and territories.

Earlier this year, Mastercard announced it was increasing its issuance of debit cards in the UK with TSB – all of the bank’s current account customers will receive a Mastercard debit card in 2018. Other banks in the UK with retail current account propositions, such as Virgin Money and Citibank, issued debit Mastercard to their customers in this year. It also provides the network to all of the UK’s digital banks.

CYBG cardholders will be given access to exclusive offers from Mastercard’s Priceless sponsorship assets, such as the BRITs and UEFA Champions League.

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