by Mark Johnston
The Yorkshire Bank and Clydesdale Bank which is owned by the National Australian Bank has seen a reduction in its overall lending during 2010 and has increased their pricing in interest rates.
In the first part of the year the bank saw its lending acceptance figures drop by £400 million to around £33 billion across all its lending which include mortgages, commercial and unsecured loans. Although at first glance the figures looked disappointing the bank was quick to point out that they had increased their new lending by £4.7 billion which included mortgages which meant that it was on track to meet its £10 billion two year target in real terms. This was great news for the UK mortgages market with the Yorkshire and Clydesdale Bank increasing its mortgage lending by 4%.
Analysts and investors suggested that although the bank had weathered the financial crisis well by being ‘dull and conservative’ they had continued to take less risk resulting in poor performance. They had moved away from riskier mortgages and were concentrating on the safest area of the UK home lending market.
Lynne Peacock, the UK chief executive, said: “We are attracting growing numbers of small and mid-corporate trading businesses and expanding our mortgage book which is greatly encouraging. As a result of our strategic focus, a significant step forward has been taken towards restoring profitability with a 53% increase in pre-tax cash earnings.
She went on to say: “This was achieved whilst we further strengthened and re-shaped our balance sheet, maintained a strong capital position and supported our customers through challenging times. While national economic recovery will provide further challenges, Clydesdale and Yorkshire Bank are in a strong position and continue to send a clear message to new and existing customers that they have real choice and support in the market.”
There are 8,300 full-time equivalent staff, fewer than half of them in retail, and more than half in England. Of 339 retail branches, 187 are Yorkshire branded and 152 are Clydesdale.
The Bank offers two fixed term mortgages, the first is a 2 year mortgage at which can be taken on a number of different terms depending what size deposit you have. Those with a 35% deposit can take a 2 year fixed rate as 3.49% (APR 4.6%). A 25% mortgage would mean an increase to 3.99%, 15% deposit 5.49% whilst the smallest deposit available is 10% and comes with a 5.99% rate at 5.1% APR. All the Yorkshire bank mortgages revert back to their standard rate of 4.59%
Those looking for a 5 year fixed rate mortgage can take the 35% deposit version at 4.58%.. The 5 year provides the same deposit options with the 25% deposit costing 5.39% (5.2% APR) and the 15% deposit version costing 6.59% (5.7% APR). The 90% loan to value mortgage that only requires a 10% mortgage is offered at 6.60% (5.8% APR).
For those looking for an offset mortgage where your bank and savings are offset against your mortgage you could do worse than look at Yorkshire Banks offset 2 year discount. The initial rate I just 2.59% for a loan to value (LTV) of 65% or 2.99% for anyone with a 25% deposit. If you’re quick you could also take advantage of their limited offer of a 50% discount of mortgage fees which could save you up to £500.
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