Clydesdale owner CYBG falls as it feels the squeeze

On track: CYBG runs Clydesdale and Yorkshire banks

Andy Buchanan/AFP/Getty Images

Simon English, Financial Editor @SimonEngStand31 January 2017

The bank behind Clydesdale and Yorkshire has admitted that margins are being squeezed while interest rates are stuck at record lows.

Shares in CYBG fell almost 3% to 276.4p on news that net interest margin — the difference between what banks charge borrowers and pay savers — slid to 222 basis points, down from 226 last year.

The bank insisted it is still on track to hit City forecasts but warned of “continuing competitive market conditions”.

CYBG, led by David Duffy, made no comment on a possible deal to buy Williams & Glyn from RBS, adding to investor concern. Shore Capital it regards such a deal as “potentially fraught with risk”.

In lending, the mortgage book increased 4.4% to £22.1 billion in the year to 31 December. Deposit balances rose 4.7% since 30 September 2016, driven by strong performance in current accounts and savings balances.

Duffy said: “While there is some uncertainty created by Brexit, economic indicators in the UK have proved resilient since the referendum vote.”