The company, which made its London debut after it was spun off by National Australia Bank, said it continued to expect mid-single digit growth in balances for the year
CYBG said new lending to small and medium-sized businesses (SME) rose 1.4 per cent to £567m in the three months ended December 31.
CYBG is one of a number of banks that emerged after the financial crisis to fill a gap in small business lending and capitalise on problems at the big banks.
Mortgages increased 7.4 per cent to £23.9bn from a year earlier.
CYBG said its expected to see mortgage price stability through the remainder of the financial year 2018. In November, it had said it would face price pressure in the business.
Both home-buyers and shoppers are under pressure from a squeeze on real take-home pay as consumer price inflation rises while wage growth slows.
“Despite the ongoing uncertainty in relation to the terms of the UK’s withdrawal from the European Union and its potential impact on the outlook for the UK economy, we remain confident in our ability to deliver the group’s FY18 and medium-term guidance,” CYBG said.
CYBG, which runs the Clydesdale and Yorkshire banks, reported quarterly net interest margin of 216 basis points, down from 221 basis points in the fourth quarter.
The lender said its CET1 ratio was 12.4 per cent at December 31, “comfortably” within its operating range.
Customer deposit balances rose 14.8 per cent to £28.7bn.
David Duffy, Chief Executive Officer of CYBG PLC, commented: “We have delivered another solid quarter of growth, despite a competitive operating environment, seeing continued momentum in both mortgage and SME lending. While the economic outlook remains uncertain we remain focused on delivering sustainable and prudent growth and are confident we will deliver our guidance for 2018 and the medium term.
“We also continue to take major strides in transforming CYBG into the UK’s leading digitally-enabled challenger bank, positioning us strongly for the future banking landscape. Our iB technology platform is ready for Open Banking today with full ‘plug and play’ fintech capability, meaning we can offer real-time, integrated services for our 2.8 million customers.”