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Clydesdale targets extra cost savings from Virgin Money takeover

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Clydesdale targets extra cost savings from Virgin Money takeover
FILE PHOTO: The Clydesdale Bank logo is seen in St Vincent Place Glasgow, Scotland, Britain, June 25, 2018 REUTERS/Russell Cheyne   -   Copyright  RUSSELL CHEYNE(Reuters)
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LONDON (Reuters) – Clydesdale and Yorkshire Banking Group has pledged to make an additional 50 million pounds in savings from its takeover of rival British lender Virgin Money, taking the total saved to 200 million pounds.

The target for the end of the financial year 2022 adds to CYBG’s previous cost savings target of 150 million pounds for 2021.

The bank will present an updated strategy to investors at a capital markets day in London today.

Investors will be focused on how CYBG plans to take on Britain’s big lenders after its 1.7 billion pound all-share takeover of rival Virgin Money last year.

The bank is betting its association with high profile entrepreneur Richard Branson’s Virgin brand will help fuel growth. The bank will start rebranding and the parent company will also be re-named Virgin Money UK PLC by the end of 2019.

Like other so-called challenger banks CYBG faces tough trading conditions, with increased competition and economic uncertainty sparked by Brexit pressuring lenders’ profitability.

CYBG said the enlarged bank would put a greater emphasis on growing in business and unsecured lending, while just maintaining market share in Britain’s competitive mortgage market.

The lender re-affirmed its guidance that is net interest margin – a key measure of underlying lender profitability – would come in at 165-170 basis points this year.

(Reporting by Iain Withers, editing by Sinead Cruise)

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