CLYDESDALE Bank owner CYBG has ruled out a repeat of the wholesale cuts which last year saw it announce the closure of nearly 80 branches, as it delivered its first statutory profit for five years in challenging conditions.

Chief financial officer Ian Smith said the lender, which closed 40 branches in Scotland last year, said it keeps branch usage under regular review. But he declared there are no plans to repeat the level of wholesale closures it unveiled last year, which was expected to cause 400 job cuts.

Mr Smith said: “We look at this on a regular basis, as you would expect. We did have a significant branch closure programme in 2017, [but] we have no plans to repeat that.”

Mr Smith was commenting as CYBG, which spun out of National Australia Bank last year, reported a statutory profit of £182 million for the year to September 30, including restructuring and conduct charges. It followed a loss of £164m the year before.

The bank, which has 70 Clydesdale branches, reported a “stable” net interest margin of 2.27 per cent. Deposits increased by three per cent to £27.7bn, while mortgages rose by eight per cent to £23.5bn and core SME lending was up six per cent to £6.8bn.

Asked to comment on the Bank of England’s move to increase the base rate by a quarter of point – the first rate rise in more than a decade – Mr Smith said CYBG does not envisage the change will have a “significant impact on customers or customer behaviour”.

He noted that it if rates are gradually increased over time it would bring a welcome boost for savers, which have suffered as interest rates dipped to historic levels following the financial crisis.

On demand for mortgages generally, Mr Smith said CYBG has seen growth continue in its current financial year, but conceded that “the picture for me is one of fairly delicate balance.”

He added: “Prices are holding up reasonably well, but certain parts of the market are seeing relatively low levels of transactions. I think people are thinking very carefully about what is the most important financial decision they’ll make.”

Meanwhile, Mr Smith noted that the bank had last year lent £2.1bn of the £6bn it is committed to lending to UK SMEs over a three-year period. He noted that firms are “having to look through the uncertainty and deal with things as best as they can. And Brexit is definitely a feature.”

Asked what measures CYBG would like to see in today’s Budget, he said an “overwhelming clamour” among SMEs for the reform of business rates. The Scottish Government has already unveiled proposals to reform the rates system in Scotland.

Mr Smith conceded that the level of claims for PPI (payment protection insurance) mis-selling received by the bank in the last six months had been higher than it anticipated. The bank announced earlier this month that by September 30 it had set aside a further £403m in “legacy conduct costs” to cover claims, with NAB funding 90 per cent of that provision. Mr Smith said he expects claims to “tail off from now to the time bar” of August 2019.

Chief executive David Duffy said: “This is a good first step in our three-year plan and we remain fully focused on the delivery of our medium-term targets, which factor in our cautious view of the economic outlook.”