CLYDESDALE and Yorkshire banking group chief executive David Duffy has underlined the company’s commitment to Glasgow and insisted the firm has made good progress as an independent in spite of suffering a fall in profits.

As the group announced that underlying interim profits fell to £107 million from £111m last time, Mr Duffy noted it has been increasing activity in England faster than in Scotland. However, he said that simply reflected the fact the economy has been growing faster south of the border than in Scotland.

Asked to comment on perceptions that control has been shifting to England, he said: “I think it’s a huge misrepresentation. Glasgow is the head office, that fact can’t be disputed.”

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The Irish executive said he has been living in Glasgow since last year, when he was appointed chief executive of Clydesdale Bank after running Allied Irish Banks since 2011. He divides his time between the city and the group’s centres in Yorkshire and London.

Other executives commute between the three centres but the entire leadership team meets in Glasgow every week.

Mr Duffy said CYBG had decided to have its registered office in England solely to ensure that it would be able to access Bank of England funding if necessary, under the discount window arrangements to help firms deal with shocks. The decision did not reflect concern about constitutional issues.

“We had to protect that funding,” said Mr Duffy. “I don’t care about politics.”

In the company’s first results announcement since it demerged from National Australia Bank in February as CYBG, Mr Duffy highlighted the pace of cost cutting at the company.

CYBG said it plans to shed 150 senior grade jobs across the UK in coming months under a voluntary severance programme, without giving further details.

Asked what the cost-cutting plans would mean for jobs in Scotland, Mr Duffy said: “You will not see big programmes to cut costs by cutting people.”

Employee numbers in Scotland have remained steady at around 4,000 since CYBG regained its independence, and went on to float on the stock market.

Mr Duffy said the £4m fall in underlying profitability in the six months to 31 March was due to the higher costs CYBG incurred as a standalone business offsetting a £6m increase in income, to £491m.

But he rejected suggestions that this raised questions about the progress the company has made as an independent.

He said CYBG had delivered on all the promises it had made when trying to win support from investors for its flotation and had achieved growth in line with expectations.

“We have a strong momentum in our business, continuing to grow ahead of the market in mortgages and over £1 billion of SME loans and facilities were made available in the first half,” said Mr Duffy.

“We have also seen encouraging growth in current accounts.”

CYBG grew its mortgage book to £21.5 billion at 31 March, up 9.6 per cent from £19.6bn at the end of the first half last time.

The value of SME lending outstanding fell slightly on an annual basis to £6bn, from £6.03bn at 31 March 2015.

However, Mr Duffy said CYBG had been winning business in targeted markets while reducing low margin lending. He believes the company has laid down foundations for good growth in the SME space.

The group is on track to reduce costs to for the year to £730m against guidance of £762m, partly as a result of cuts in staff numbers.

It has announced plans to close 26 branches in coming months including nine in Scotland.

CYBG has set great store by developing digital offerings to appeal to customers and using technology to cut costs.

Earlier this month it revealed it had set aside another £450m to cover the costs of misselling Payment Protection Insurance, taking the total to around £1.5bn.

However £406m of the latest increase was covered by NAB under the demerger agreement.

CYBG does not expect to face further charges but warned the eventual costs may differ materially from estimates.

To 31 March 2016, the Group has received 253,000 complaints and has allowed for 87,000 further walk in complaints.

CYBG said the prolonged period of low interest rates has created challenges but the underlying economic market backdrop continues to be supportive, with relatively low levels of unemployment and consumer indebtedness.

The Sydney Morning Herald reported that Mr Duffy had said CYBG need not fear the UK voting next month to leave the European Union because the bank could cut costs or take market share from rivals to offset any economic slowdown

Analysts at Macquarie investment bank said CYBG had published a robust set of results.

They noted profits were depressed by a £11.5m impairment charge CYBG took against its oil and gas loan book.

Shares in CYBG closed up 10.25p at 247p.

The company floated at 180p in an exercise that gave CYBG a market capitalisation of around £1.6bn.

The bank had a book value of £2.7bn at 30 September.

Some market watchers were surprised CYBG proceeded with a flotation amid a period of volatility in global markets.

Some 75 per cent of the shares were allotted to investors in National Australia Bank.