Yorkshire Bank owner CYBG has hailed a "resilient" half year performance despite intense competition in the mortgage market although it warned of further branch closures following the acquisition of Virgin Money.
The bank, which bought Virgin Money for £1.7bn in October, said the deal is bedding down well.
Following the announcement of six Yorkshire Bank branch closures last week, CYBG's CFO Ian Smith said this would not be the end of bank closures.
"There are a number of situations where we have a Yorkshire or a Clydesdale branch quite close to a Virgin Money branch," he said.
"We will pick the best one of those and carry on so you will see some de-duplication of branches like that. We will always review our branch footprint. We do it for good reasons and we do our best to help our customers through that."
CYBG said it swung to a £42m profit in the six months to March 31, against losses of £95m a year earlier.
On a pro-forma basis and including the Virgin Money business dating back to October 2017, underlying pre-tax profits fell 5 per cent to £286m, although this was better than expected.
"It's a pretty tough market out there," said Mr Smith.
"In difficult circumstances we outperformed expectations. People expected us to have a much weaker margin. We managed our book pretty carefully. I think people were pleasantly surprised by that and we made progress on costs which is something we've got a reputation for."
He said the group was "delighted" with the Virgin Money acquisition.
"All the things we thought the business had and would bring to us when we were planning the deal, we've confirmed. There is a better opportunity to make the combined business really sing," he said.
He added that Yorkshire Bank customers will see a rebranding to Virgin Money in 2020 and 2021.
"We've been talking to customers about it and I think they are realistic and understanding about how the high street presence is changing and how sometimes you have to balance that history and heritage with something that enables you to be sustainable long term," he said.
Including the costs of the takeover and integration expenses, pro-forma pre-tax profits fell 80 per cent to £9m as it also took another hit from the payment protection insurance (PPI) scandal.
The group has put by another £33m for conduct charges, including another provision for PPI as claims ramped up ahead of the August deadline.
David Duffy, chief executive of CYBG, said: "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.
"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."