It announced cash earnings before tax of £297 million for the 12 months to 30 September 2005, stable on the previous year.
Lynne Peacock, chief executive officer, National Australia Group UK, said: “We have stabilised profits, while conducting a major restructure to make the business more competitive, are managing margins down to bring them more into line with the UK market and invested in an expansion program for future growth.
“We have taken the hard decisions that were needed for our business to be efficient, nimble and competitive and to develop an offering that is distinctive and strongly differentiates us from our competitors. We are getting costs under control and have made great progress in re-engineering processes, simplifying management structures and improving our efficiency.
“We have delivered more competitive products and invested in our brands, technology and compliance. We have pressed ahead with building our integrated financial services business and third party distribution of our mortgage products, building a unique offering that is already showing results. We have also almost completed the reconfiguration of our retail branch network across the UK.
“We are now seeing strong results from our key areas of investment and believe we are generating the momentum we need to see sustained growth. Mortgage volumes have increased substantially, with Clydesdale Bank writing an additional 40 per cent, which now includes the sale of Clydesdale mortgages through mortgage brokers, while Yorkshire Bank was up 15 per cent on the previous year. Business lending volumes have also increased, with Clydesdale Bank up 19 per cent and Yorkshire Bank up 40 per cent.
“There is still a great deal to do to complete our turnaround. However, to have delivered this result in a period of such enormous change is an impressive achievement.”
Operational Milestones
Key operational milestones included:
• The sale of National Irish Bank and Northern Bank to the Danske Bank Group
• The completion of the “build” phase of a network of Financial Solutions Centres offering integrated business and premium banking services to small-medium sized business customers. By 30 September 2005, there were 32 Financial Solutions Centres in the south of England, 28 centres in the north of England and 18 centres in Scotland;
• The expansion of the third party distribution channel which added £989m of mortgage completions by 30th September 2005. The business now has relationships with more than 300 of the UK’s leading brokers;
• A review of the distribution strategy and branch network which resulted in a decision to close 64 Clydesdale Bank branches and 38 Yorkshire Bank branches over a 6-12 month period. This
decision reflected the changing needs of our customers and the different ways in which they are banking;
