Yorkshire Bank’s Australia parent sees net profits fall

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NATIONAL Australia Bank, owner of Yorkshire and Clydesdale Banks, reported a 15 per cent drop in first half net profits yesterday following losses at the two UK banks.

Net profits for the six months to March 31 fell to £1.3bn.

Last month NAB announced it was axing 1,400 jobs from Yorkshire and Clydesdale after the two banks made a £25m loss in the six months to the end of March.

Charges for bad UK debts surged by £131m to £282m.

About 300 jobs in Yorkshire will go by 2015 as Yorkshire and its sister bank Clydesdale shed one in six of their 8,600-strong workforce.

There were no new facts and figures about the UK operations in NAB’s 2012 half year results yesterday.

NAB’s chief executive Cameron Clyne said: “What we are saying is that the UK operation has been an underperforming asset for us for some time.

“I think what we are trying to do is improve the returns for shareholders, we’ve always maintained a fire sale is not the basis to do that.”

“As to what happens to the asset in the future, we’ll assess those options as time goes along,” he added.

The UK losses were offset by higher trading, fee income and rising mortgage market share in Australia. NAB is offering the lowest mortgage rate among its peers as it tries to raise its lagging home-loan market share.

The bank hopes to complete the UK restructuring by 2015. It plans to close bank offices, cut jobs, close the commercial real estate business and focus on lending to small and medium businesses in the north and Scotland.

Last month Mr Clyne blamed the cuts on Britain’s economy being “longer and slower to recover than experienced in the 1930s”.

Unions branded the cuts “brutal”, as NAB revealed plans to increase dividends to shareholders.

The bulk of the job losses will be in the South. The bank is closing 29 business banking centres, as it retrenches to its heartland in the North and Scotland.

Yorkshire Bank will merge its Leeds back office operations into one site at Merrion Way, closing its Brunswick Point office.

About half of the bank’s 2,000 Yorkshire staff are based at the sites, which are responsible for tasks including risk, fraud and collections.

In total, it is closing six back office sites.