Yorkshire Bank staff face up to 'tough decisions' (From Bradford Telegraph and Argus)

Yorkshire Bank staff face up to 'tough decisions'

10:20am Wednesday 8th February 2012 in Business By Chris Holland

Staff at Yorkshire Bank offices in the Bradford district are awaiting the result of some ‘tough’ decisions which its Australian owners have pledged to make as part of a strategic review of the business over the next three months.

Among speculation that it may pull out of the UK, National Australia Bank, which owns the Clydesdale and Yorkshire banks, has put its UK operation under review, fuelling uncertainty among its 8,300-strong workforce.

National Australia Bank has given itself until May to complete the strategic review that will steel the business for a slow economic recovery. The overhaul is expected to shrink the size of its UK operation, which has 337 branches, although reports in Australia have said it may look to renew efforts to exit the UK market altogether.

Yorkshire Bank was founded in 1859 Halifax, and has 185 retail branches, including about ten in Bradford and the Aire Valley. Its network of financial solution centres, aimed mainly at business customers, includes the West Yorkshire centre covering Bradford, Calderdale and Kirklees, which is based on Canal Road.

While the UK business remains profitable, NAB said the division’s margins were squeezed due to higher funding costs, while lending activity was subdued and fees lower as a result of weaker economic activity.

Its charge for bad debts was also higher in the first quarter of the company’s financial year as the “slow and fragile” pace of the economic recovery continues to impact customers. In October credit ratings agencies Moody’s and Fitch downgraded Yorkshire and Clydesdale’s debt rating.

David Thorburn, chief executive of the Clydesdale and Yorkshire banks, said: “The time is right for us to re-examine our business given the recent reversal in the economic recovery, the structural changes in the UK banking market and our performance in that context.”

He pledged to continue to support the company’s branch network and its saving and mortgage operations.

Mr Thorburn said: “Although reshaping the business will mean that we will have to take tough decisions, we are confident that the outcome will provide a strong and sustainable future for Clydesdale and Yorkshire banks.”

NAB has been the subject of deal speculation over the last year after it was unsuccessful in the auction of 318 branches put up for sale by Royal Bank of Scotland, a deal later secured by Spanish giant Santander.

It is thought to have rejected an offer for its UK operations from private equity firm Sun Capital last autumn.

Yorkshire Bank was founded as the West Riding of Yorkshire Provident Society and Penny Savings Bank . During the late 19th century it became known as Yorkshire Penny Bank, changing its name to Yorkshire Bank Limited in 1959.