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Increasing Bad Debt For Yorkshire And Clydesdale Banks

by Jim ONeil on February 14, 2011

in uk loans news

During the last three months of 2010, the economic recovery in the UK faltered, causing both Yorkshire and Clydesdale Banks to experience an increasing amount of bad debt. National Australia Bank (NAB), their parent company, reported a decline in the ratio of bad loans to 3.34 percent during the end of December 2010. As of the end of September 2010, this figure stood at just 3.15 percent.

Though credit demand has waned, NAB reports being on track regarding its two-year credit goal. The bank wants to provide mortgage holders and businesses with £10 billion in gross new lending by October 2011. According to NAB, the economic outlook in Britain is still bleak, with recovery taking place slowly due to governmental austerity measures that were recently implemented.

The update provided by NAB on Tuesday encompassed the first quarter of the financial year for the organization. During this time, economic output in the UK experienced a 0.5 percent contraction. This change, due to low consumer confidence and severe weather, led many to fear that the UK was headed toward a double-dip recession. Despite this, NAB UK operation Chief Executive Lynne Peacock r

eported that the bank’s business in the UK is proving resilient.

There will be no change in the strategic direction of NAB when it comes to its UK market. Together, Yorkshire Bank and Clydesdale Bank have 8,355 employees working at approximately 400 branches. During their most recent financial year, the banks had a 53 percent increase in profits to £164 million. Bad debt charges experienced an 18 percent decline.

NAB purchased Clydesdale Bank in 1987 but has not rested on its laurels. During the last year, there was speculation regarding deals after it lost to Santander in the auction of 318 Royal Bank of Scotland branches. On Monday, NAB reported that its first quarter earnings increased 18 percent, reaching £817 million.

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