National Australian Bank (NAB) has reported a £183m pre-tax loss at its UK banking operations in its full-year results.
NAB, which owns Clydesdale and Yorkshire Banks, revealed that underlying profits were down 15.9% to £448m in the 12 months to 30 September 2012.
The charge for bad debts in its UK operations hit £631m, up £335m on the previous financial year, mainly as a result of business lending losses.
David Thorburn, chief executive of Clydesdale Bank, said: “In addition to higher funding and liquidity costs, this reflects the higher charges to provide for bad and doubtful debts which increased to £631m against a backdrop of prolonged economic uncertainty, particularly the further deterioration in the commercial property market.”
According to NAB, average gross loans and acceptances in the UK soared £600m to reach £33.6 billion in the period, with “strong support” for mortgage customers behind this increase, with mortgage growth of 9.8%.
Business lending balances were down 2.8% in the year to September 2012, compared to a reduction of 5.1% for the wider market.
Thorburn added that the transfer of the majority of its commercial real estate assets of £5.6 billion before provisions to NAB was a “significant step” in strengthening its funding position and improving its balance sheet structure.
As part of its restructuring programme, which will see 1,400 staff at Clydesdale and Yorkshire Bank branches made redundant by September 2015, the bank made 468 job cuts in the year.
The banking group is simplifying its business model to focus on its retail operations and lending to small businesses across Scotland and Northern England.