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 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.”
He said the group was “delighted” with Virgin Money.
“All the things we thought the business had and would bring to us when we were planning the deal, we’ve confirmed.
“There is an 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. Sometimes you have to balance that history and heritage with something that enables you to be sustainable long term,” he said.