Clydesdale and Yorkshire Banks return to profit

The bank said the implementation of the strategic review would be complete by the autumn

The Clydesdale and Yorkshire banking division has made a half-year pre-tax profit of £54m, compared with a loss of £38m in the same period last year.

The division is owned by the National Australia Bank (NAB).

The bank says the improvement follows the transfer of £5.6bn of commercial real estate assets to NAB last October.

Last year, the Australian-based group announced a strategic review of its UK business which led to hundreds of job losses.

David Thorburn, chief executive of the UK bank, told BBC Scotland that good progress had been made.

He added: "Last year we talked about this as a three-year programme but we're well ahead of where we expected to be and most of the reshaping work will be behind us by the autumn".

He said the transfer of real estate business had helped cut bad debts by £91m.

There has been continued speculation that NAB may sell off its UK business, but Mr Thorburn said he would not "fuel the fires" by commenting on the reports.

He said: "I'm spending 100% of my time on the implementation of the strategic review which is all about transforming the business and getting it in better shape."

Mortgage lending in the period to the end of March increased by more than 9%, well above the UK average of 1.5%.

However, lending to small and medium-sized businesses (SME) fell.

The bank is investing significant sums in refreshing its brands and in technology.

Mr Thorburn said the bank wanted to target younger customers.

He said: "What they are saying to us is that they want different ways of interacting - they want mobile banking in particular, which is something we will be launching in the summer.

"They want to use contactless cards and are much less likely to visit a branch so we're trying to respond to that with the investments we're making."