Yorkshire Bank group to close another 50 branches
The parent company of Yorkshire Bank signalled has more job losses and confirmed around another 50 branches will close as it ramps up cost cutting.
The Clydesdale and Yorkshire banking group, which was spun off from former owner National Australia Bank in February, said it will trim its branch network from 248 to less than 200 over the next three years as it looks to slash costs by a further £100 million.
The group’s latest cost cutting moves come after it recently announced plans to shut 26 branches nationwide by the end of September and reduce its workforce, with nearly 500 jobs axed over the past 18 months.
It will deliver the new cost savings by the end of September 2019 to help it meet performance targets earlier than planned.
The bank said its “refreshed” strategic plan also takes into account revised expectations for the UK economy after the Brexit vote.
But alongside the cost savings, it is investing more than £350 million over the next two years to overhaul the group, by improving its online banking offering and boosting technology platforms.
Chief executive David Duffy said: “Delivering our strategy will provide an improved branch experience, supported by a strong digital offering, reflecting the new face of banking and putting customers at the heart of what we do.”
The group has already trimmed costs to around £730 million in the current year to the end of September, which is 4% more than originally targeted.
It has cut its branch numbers by nearly a quarter - 23% - since 2013, from 323 to around 248 this year.
Staff numbers are around 7% lower since March last year, down from 7,018 to around 6,500.
In an investor presentation, the group said it wants to improve its customer-facing operations, but also have “smaller and more efficient” support teams.
It has not revealed how many jobs are expected to go under the latest cost cutting plans.
The group said it expects its net interest income to be “broadly stable” this financial year and next, but now expects its residential loan book to grow at a slower pace following the Brexit vote.
It is pencilling in growth of around 5% by 2019, against previous expectations for 8% by 2020.
In May, it reported a 4.2% fall in underlying earnings to £107 million in the six months to the end of March, while net interest income rose 2.5% to £400 million.
Shares fell around 5% after the latest announcement, but at just under 260p are still far higher than the 180p float price seen when it listed in February.