Ex-AIB boss Duffy hits out at 'lazy' critics of Clydesdale
Published 29/12/2015 | 02:30
Former AIB boss David Duffy has hit out at "lazy" critics of his plans for the Clydesdale and Yorkshire banks.
Mr Duffy, who left AIB earlier this year to take over at Clydesdale (which runs Yorkshire Bank), wants the bank to grow its mortgage and retail lending by 50pc and small business lending by 25pc in the coming five years.
Analysts told the Daily Telegraph that Clydesdale could struggle to compete effectively with the big banks, as it will have to tempt customers away from the giants with lower prices, while having a relatively high cost base compared to its rivals.
But Mr Duffy argues that those critics have failed to appreciate its substantial growth in recent years.
"I think it is lazy commentary by people - look at our actual performance. The growth rates for the future are based on execution of the past three years," said Mr Duffy.
"If you look at mortgages, we've grown at 10pc for the last four years. Last year we did £2bn of new mortgages, £1.9bn of new SME facilities, and £2.2bn of deposits. Each aspect of the business performed strongly.
"So when we look at the growth and the returns on equity we're planning, it is an extrapolation of existing performance rather than some aspiration."
Clydesdale's growth plans come as it prepares to be sold off by its parent, National Australia Bank (NAB). The bank wants to expand outside its core regions of Scotland and the north of England, and also wants to gain more younger customers.
NAB's planned initial public offering will see 25pc of the bank's shares sold to new investors and the remaining 75pc given to existing shareholders in NAB. Independence also means the bank no longer has to consult bosses in Australia before making any big decisions.
"Customers are going to see us controlling our own destiny in terms of decision making. That is most valuable. You look at a customer's needs, you decide what we can do together and you execute it, you don't have to write to Melbourne about it," Mr Duffy said.
Currently only 23pc of the bank's customers are classified as young and affluent, compared with 31pc of bank customers across the wider market.
Those younger customers have an average of £12,100 in debt compared with just £1,600 for older customers, meaning they are more profitable for the bank and so are a more attractive group to target.
Clydesdale is confident it can cope with a rapid expansion in customers as it already has IT capacity in place to handle twice as many transactions as now.
Mr Duffy hopes he will be better at poaching younger customers than the other challenger banks, naming TSB, Williams and Glyn and the Co-op Bank as competitors of similar scale.
"All of those don't have the full-scale SME and retail franchise that we do... so we're situated extremely well," he said. (© Daily Telegraph, London)