CLYDESDALE Bank has seen its residential mortgage book swell to more than £19 billion for the first time while provisions for bad and doubtful debts fell during the first quarter of its financial year.

Outgoing chief executive David Thorburn also confirmed he will leave the bank on February 28.

Interim control will be passed to Debbie Crosbie, currently chief operating officer, from February 16 and she will remain in charge until incoming chief executive David Duffy completes his notice period at Allied Irish Banks.

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Mr Thorburn said: "Following my decision to step down as [chief executive], we've been working to ensure a smooth transition in leadership ahead of the new [chief executive], David Duffy, arriving within the next few months."

Mr Thorburn said the bank had seen encouraging growth in retail product lines in the three months to December 31.

Residential mortgage lending balances were greater than £19bn for the first time while a £150 current account cash back offer was said to have led to a net growth in customer numbers.

Clydesdale said there had been 5.25 million people using its mobile banking services in December, up 28 per cent on November.

Its mobile phone payment capability was introduced in November with 3,000 people registering in the first two weeks.

Post Office access was extended to all customers while branches opened in Aberdeen and Sheffield.

Clydesdale also saw the value of its banknotes in circulation reach a record high of £2 billion during December.

Mr Thorburn said: "Good progress continued to be made in moving the business forward in the first quarter of the financial year.

"Further significant steps were also taken in the quarter to increase our support for customers, delivering a wide range of product and service improvements from current accounts and mortgages through to mobile and internet banking.

"More improvements are in train as part of our clear aim to build a better bank for customers."

Clydesdale owner National Australia Bank said its charges for bad and doubtful debts rose 30 per cent in the quarter to A$227m.

However it noted that the figure was stable once certain elements from the UK commercial real estate portfolio and economic cycle adjustments had been stripped out.

There were no further UK provisions made for payment protection insurance or complex business loans.

NAB said its unaudited cash earnings in the quarter were up six per cent to A$1.65 billion.

NAB group chief executive Andrew Thorburn did not give any update on plans to sell off UK banking operations including Clydesdale and Yorkshire bank.

However he said: "This is a solid first quarter result, which has seen the continued strengthening of our core Australian and New Zealand franchise and the further reduction of legacy issues.

"Further significant improvements in asset quality over the quarter are pleasing and reflect

both the benign operating environment and the initiatives undertaken over recent years to

improve our risk profile.

"Importantly, we also continue to make good progress in dealing to our low returning assets."

NAB said UK banking cash earnings increased over the quarter as a result of lower bad and doubtful debts.

Revenue had fallen slightly but that was because the comparative period had a one-off gain relating to a sale and leaseback deal.