The bank, along with sister operation Yorkshire, said corporate lending across the sector is down more than 5%.
The figures were revealed in accounts for the 12 months to September 30 which show Clydesdale booking a £183 million loss, compared to a £237m profit in 2011.
The 2012 loss was attributed to charges to provide for bad debts – mostly relating to Clydesdale's troubled commercial property portfolio – going from £335m to £631m.
The commercial real estate business was hived off to parent National Australia Bank on October 5.
Clydesdale chief executive David Thorburn told The Herald if the real estate deal had taken place at the start of the financial year the bank would have posted a substantial profit.
He said: "First and foremost it is a disappointing result. It is not surprising but it is disappointing. Our performance as a business is not where it needs to be.
"The main challenge was the double-dip in the commercial property market and the increase in bad debts that came as a result of that.
"We have now taken that commercial property portfolio out of our business. If we had done that at the start of the financial year just ended rather than just after and then restated these accounts we would actually be reporting a profit of £148m. So you can see just how fundamental that step is to our business."
Mr Thorburn was pleased with the business lending performance and said: "We don't do new commercial property lending so the overall size of the market is smaller for us. Also the market as a whole shrank by 5.1%.
"The borrowing market is still very confused with SMEs in the main still deleveraging and avoiding investment."
The Glasgow bank is ahead of schedule in its cost-cutting plans which will see 1,400 people leave by September 2015.
The 468 who have already left contributed to a £29m drop in operating costs to £697m.
Clydesdale said the figure of a net reduction of less than 100 roles in Scotland remains unchanged.
Mr Thorburn said: "We are making good progress in those changes. They are painful and difficult but necessary and we are actually ahead of schedule.
"We are taking the right steps to put the business on a much better footing going forward.
"The property deal is a great platform for us to build on. We are cautiously optimistic as the economic environment is challenging and there is a lot of regulatory scrutiny on all the banks."
Mr Thorburn said stepping down from the main NAB executive committee this year had been "a big help" as it gave him more time and energy to focus on Clydesdale and Yorkshire.
Overall net interest income at Clydesdale was down by 11.1% from £972m to £864m.
Average gross loans and acceptances grew 1.8%, or £600m, to £33.6bn mainly due to mortgage lending up almost 10%.
Retail customer deposits increased 2%, or by £500m, to £25.3bn. Mr Thorburn, who said the UK Government's funding for lending scheme was a helpful tool for banks, added: "The mortgage market grew by 0.5% while we grew by a whisker under 10%.
"I think that is because we have been in the mortgage market all the way through and have a good service so are getting the benefits from that consistent presence.
"Investing in mortgages and current accounts has been the right thing to do as well as refocusing on our heartlands in Scotland and Yorkshire."
Internet banking customers increased from 562,000 to 605,000.
National Australia said its UK operations played a major part in a drop in net profit from A$5.2bn to A$4.1bn.
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