CLYDESDALE Bank owner CYBG drew a thumbs-up from the City yesterday as it reported a first-half profit, boosted by growth in customer lending and the benefits of its merger with Virgin Money.

But there was no sense of bosses getting carried away. While the growth in the bank’s mortgage book was welcomed, chief financial officer Ian Smith said it was too early to say a corner has been turned in this respect. The bank’s net interest margin – in essence the difference between interest received and interest paid - was down marginally on the first six months of last year.

CYBG emphasised again yesterday that the economic backdrop continues to be defined by uncertainty, with the Brexit negotiation process showing no apparent sign of reaching a conclusion.

As Mr Smith observed, these are hardly encouraging times for anyone looking to buy a house or invest in their business. And he is not convinced conditions are going to brighten any time soon, believing that the “narrow self-interest” of both the Conservative and Labour parties are impediments to getting a deal done. “Consumers hate it,” Mr Smith said. “It is very difficult for people to enter into a big financial commitment like a mortgage, or think about moving house, at the moment. Our business banking clients... are keeping their hands in their pockets.”

On the plus side for CYBG, it pointed to “clear progress” in its Virgin Money merger. But while it is on course to deliver the desired cost synergies, it may prove to be less convenient for customers if further branch cuts are made.