The Clydesdale Bank CYBG PLC CDI 1:1 (ASX: CYB) share price will be one to watch on Wednesday after the UK-based bank released its third-quarter update.
Key highlights from the release include:
- Annualised mortgage growth of 5.8% to £22.8 billion for the nine months to June 30, 2017
- Record volumes of applications in the third-quarter.
- Net interest margin increased to 2.29%.
- Efficiency programme ahead of schedule: operating costs on target to be reduced to below £680 million, ahead of guidance of £690 million to £700 million.
- CET1 ratio of 12.4%, down from 12.5% in the March quarter. But comfortably within its target range of 12% to 13%.
- Deposits down 4% to £26.2 billion.
Overall, I believe this was a solid result from Clydesdale and Yorkshire Bank and expect to see its shares climb higher during trade on Wednesday.
I was impressed with the record level of mortgage applications, as well as the early success of its efficiency program.
Management has worked especially hard on this and the bank is finally starting to reap the rewards now, no doubt much to the delight of its shareholders.
Should you invest?
Whilst my preference in the industry remains Westpac Banking Corp (ASX: WBC), if Clydesdale and Yorkshire Bank can build on this result in the fourth-quarter then there could be significant upside potential for its shares.
After all, at just 0.7x book value, its shares are easily the cheapest amongst the banks on the Australian share market.
