Clydesdale & Yorkshire Banking Group (CYBG) has announced 1.5 per cent growth in its mortgage division in the first quarter since its takeover of Virgin Money.
In a trading update this morning (February 6) CYBG said good progress had been made with its Virgin Money integration programme which completed on 15 October 2018.
It stated its trading update had been prepared on the basis that the combination with Virgin Money had been in effect since 1 October 2017.
The group stated its integration of Virgin Money was on track and that it was pleased with the progress being made, with the group's underlying cost:income ratio in Q1 staying below 60 per cent.
The company now expects to deliver a minimum £150m of savings by the end of 2021, up from the £120m previously announced.
The group also revealed it was still receiving about 1,800 PPI complaints per week, but it said this was in line with expectations. It stated it remained comfortable with its current level of PPI provisioning.
The regulator had launched a campaign on PPI claims after introducing a deadline for bringing claims set for 29 August this year. With this campaign it hoped to entice remaining claimants with eligible claims to come forward.
But a spokesperson for CYBG said the company had seen a decline in PPI complaints since the FCA’s advert campaigns.
They said: "Over the last year and a half, we’ve seen both the number of walk-in complaints decline, and a decrease in uphold rates."
Quarter one customer lending growth stood at 1.4 per cent to £71.9bn, while mortgage growth increased 1.5 per cent to £60bn.
CYBG stated pricing on mortgages had remained competitive in the past year and in light of this its net mortgage lending growth for the full year would be lower, while SME and unsecured lending growth were expected to remain robust.
The group’s net interest margin (NIM) was lower than 2018 due to pricing pressure in the mortgage market.
It now expects to deliver a NIM of 165-170bps for 2019. Quarter one NIM (three months annualised) stood at 172bps.
SME growth stood at 1.2 per cent to £7.6bn. The group said it expects to lend £6bn to its SME customers over three years by the end of 2019.
David Duffy, CEO of CYBG, said: "The group has made a good start to the year and we are making encouraging progress on the initial stages of the three-year Virgin Money integration programme.
"In a highly competitive environment, we have delivered ahead-of-market lending growth for our customers and improved our NIM guidance for 2019.
"I am particularly encouraged by our performance in SME. We are well prepared for the start of the RBS Incentivised Switching Scheme and we hope to attract a large proportion of the 120,000 SME customers that RBS are required to switch."
Mr Duffy said CYBG had recently submitted its application for a grant from the RBS Capability and Innovation Fund, and believed the group offered a strong case for delivering a boost to competition in the SME market.