Bad debts down and earnings have improved National Australia Bank reports
Clydesdale Bank parent company National Australia Bank (NAB) is reporting an improvement in earnings from its UK subsidiaries.
NAB said in a market update today there has been an improvement in bad debt provisions linked to its UK operations - which includes Yorkshire Bank - and the UK business has reduced its operating expenses.
NAB announced it was undertaking a strategic review of its UK banking divisions in February of last year.
The Australian parent company reported its first annual loss last year, largely on losses from its UK operations.
Clydesdale Bank, in its full year results to September 30 2012, said underlying profits fell by £448 million, with the bulk of those losses stemming from “further deterioration in the commercial property market”.
The Glasgow-based lender also reported a near 90 per cent rise in bad debts last year to £631 million, mostly on commercial property write downs.
In April, parent group NAB announced plans to cut 1,400 jobs by 2015 and would withdraw from commercial property lending, which accounts for 90 per cent of non-retail lending in the UK, to focus on consumer and small business lending.
And last October £5.6 billion in commercial real estate assets - before provisions - were transferred over to NAB, which Clydesdale described as being a “significant step in further strengthening our funding position as well as improving our balance sheet structure going forward”.
The Australian parent group said its first quarter earnings rose 3.6 per cent to around AUSD$1.45 billion (£956 million) in the first quarter.