Fresh £130m PPI hit for Clydesdale Bank

So far, the bank has set aside £386m for PPI and paid out £234m. Last month it was also fined £8.9m for mortgage errors with the potential bill for that expected to be £42m.

Mr Thorburn said: "This is our best endeavour at this point to provision for PPI but you can't really with any certainty say when it will end.

"The volume of complaints has declined at a lower rate than we had expected hence the need to raise a further provision.

"I don't think we can really see an end to that process at the moment."

Mr Thorburn said a turnaround plan, which took 1400 people out of the bank, has been completed a year ahead of schedule and saves around £46m of costs.

He said: "It has been a difficult period but we are starting to see the benefits.

"You can never say change is over in a business like ours but I don't envisage any further restructures of this nature.

"I'm happy with the progress we have made but there is still a lot of work to do before we get to the end of the journey here."

Annual results for National Australia Bank's UK arm, which includes both Clydesdale and Yorkshire banks, show pre-tax earnings of £127m, an improvement from the £183m loss for the previous year.

That was helped by a large reduction in charges for bad and doubtful debts with the figure falling from £631m to £158m in the 12 months to September 30.

A package of troubled commercial property assets worth around £5.6 billion was taken on to NAB's balance sheet on October 5 last year. NAB said it has reduced the UK commercial property portfolio to £4bn. Mr Thorburn said the removal of that portfolio was mainly responsible for the UK's falling bad debt numbers.

He said: "Obviously our commercial property change is a big driver of that. In business lending apart from commercial property the reduction is about £30m which is an encouraging improvement. We are also seeing an improvement in bad debts in relations to things like credit cards and personal loans which I think is driven by the prevailing economy more than anything."

Gross loans and acceptances were down from £33.6bn to £27.1bn while customer deposits dipped from £25.3bn to £24.6bn.

Mr Thorburn would not comment on market speculation NAB is still looking to offload its UK operations.

Clydesdale, which employs around 4000 people in Scotland, said it had grown its share of the mortgage market over the year and business lending demand has picked up since the summer.

Mr Thorburn said: "It is a modest pick-up [in the business bank] but a noticeable change in the trend. I would imagine that is on the back of the economy turning the corner and is quite encouraging. We do want to grow our business bank so I hope that carries on and I expect it will.

"We are very clear we want to grow our business bank across a range of sectors. The best way to do that is helping our existing customers but of course we would like some new ones as well."

New rules making it easier to switch bank accounts is seeing customers leave and join Clydesdale although Mr Thorburn said it was too soon to assess what the long-term impact may be.

He said: "We do have customers joining us through the system and leaving us through the system so the system is working but it has not been going long enough to draw any conclusions about underlying trends."

Mr Thorburn indicated Clydesdale will continue to invest in improving its mobile and internet banking platforms. There are no plans to open any new branches with the estate standing at 323 across the UK with 147 of those in Scotland.

Mr Thorburn said: "Customers still value branches so it is an important part of our mix but footfall is declining in all banks.

"The take up of internet and particularly mobile banking is growing very strongly and customers want more ways to access services."

NAB said its total underlying earnings across the group grew 9.3% to a record A$5.95bn (£3.5bn)