The owner of the Clydesdale and Yorkshire banks boosted its first quarter lending but its shares fell because of concerns about a weaker mortgage market.
The size of CYBG’s mortgage book increased to £23.9 billion at the end of December, up 7.4 per cent from a year earlier and 1.7 per cent compared with the end of September.
CYBG was spun off from National Australia Bank when it floated on the London Stock Exchange in 2016. It has 2.8 million customers and has invested heavily in improving its digital products while overseeing branch closures. It said yesterday that core lending to small and medium companies rose 1.4 per cent to £6.8 billion with £567 million of new loans in the three months to the end of December. Deposits were up 14.8 per cent to £28.7 billion compared with a year earlier.
David Duffy, chief executive, described it as a “solid” quarter with positive momentum in mortgage and business lending. “While the economic outlook remains uncertain we remain focused on delivering sustainable and prudent growth,” he said.
However, Mr Duffy confirmed that he expected the rate of mortgage growth to slow to mid-single digits during the rest of the bank’s financial year, which ends on September 30. He said: “While the mortgage market remains competitive, we expect to see price stability through the remainder of [the year].”
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The forecast from the bank adds to the signs that the UK housing market may be cooling as there were 61,039 mortgages approved by banks in December, the lowest number since January 2015.
Mr Duffy indicated there was a healthy pipeline of business lending and CYBG remains on track to hit short and medium-term targets. Mr Duffy said CYBG’s digital banking technology was ready for the new open banking regime where customers may choose to share their data with other lenders to find better deals.
Shares closed down 12½p at 318¾p.