The owner of Yorkshire Bank said mortgage lending lifted 1.5 per cent to £60bn and small business lending rose 1.2 per cent to £7.6bn.
CYBG, which also owns Clydesdale Bank and recently acquired Virgin Money, increased its outlook for its net interest margin - a key measure for retail banks.
It also upped its cost-cutting targets following the Virgin Money deal - now expecting annual savings at least £150m by the end of 2020-21, against the £120m previously announced.
CYBG also reported payment protection insurance (PPI) complaints of about 1,800 a week, but said this was in line with expectations.
David Duffy, chief executive of CYBG, said: “The group has made a good start to the year and we are making encouraging progress on the initial stages of the three-year Virgin Money integration programme.
“In a highly competitive environment, we have delivered ahead-of-market lending growth for our customers and improved our NIM (net interest margin) guidance for 2019.
“We have also made good progress on cost reductions and have now increased our integration synergy target to £150m.”
The bank says it is hoping to attract a large proportion of customers from Royal Bank of Scotland (RBS). RBS has been forced to fund an effort to boost competition in the sector as a result of its Government bailout over a decade ago.
Alongside CYBG, ten other banks are in the running to poach RBS business customers under the Incentivised Switching Scheme.
Mr Duffy said: “I am particularly encouraged by our performance in SME. We are well prepared for the start of the RBS Incentivised Switching Scheme and we hope to attract a large proportion of the 120,000 SME customers that RBS are required to switch.
“We have also recently submitted our application for a grant from the RBS Capability and Innovation Fund, where we believe we offer the strongest case for delivering a genuine boost to competition in the SME market.”
He added: “Market conditions remain uncertain while we await the outcome of the Brexit negotiations, but we remain focussed on supporting our customers and delivering against the factors within our control.”
Last week, CYBG faced a shareholder revolt against its executive pay plans with 34.2 per cent of investors voting against the proprosals.
Under the plans Mr Duffy’s potential bonuses would rise to 118 per cent of his salary, while his long-term share payout would rise to 177 per cent – meaning his total maximum payout could jump from £1.8m to a possible £4.2m if all targets are met.
While the plans were approved, with 65.8 per cent of shareholders voting in favour, the bank said it would engage in further talks with investors.