CYBG falls into the red thanks to £350m hit from PPI complaints

The banking group estimates 110,000 of its customers will complain in the year running up to the deadline

The midsized bank is currently in talks with Sir Richard Branson’s Virgin Money over a potential £1.6bn takeover (Reuters)

Clydesdale and Yorkshire Bank owner CYBG fell to a loss of £95m from a profit of £46m after putting aside £350m to deal with more payment protection insurance complaints.

Bank customers have until August 2019 to complain about missold PPI and the City regulator has stepped up a campaign to ensure that as many people as possible claim refunds and compensation if they are eligible.

CYBG estimates 110,000 of its customers will complain in the year running up to the deadline. The bank also earmarked £18m “other legacy and conduct issues”.

Stripping out one-off costs, CYGB reported a 28 per cent jump in profits to £158m for the six months to the end of March.

The midsized bank is currently in talks with Sir Richard Branson’s Virgin Money over a potential £1.6bn takeover which could create a challenger to the UK’s biggest lenders. It didn’t provide an update on the bid on Tuesday.

CYBG has until 5pm on 4 June to make a firm offer or withdraw its proposal, according to takeover rules.

The combined group would serve around 6 million personal and business customers.

“While the economic outlook remains uncertain, CYBG is well-positioned to continue executing our existing strategy and to capture future growth opportunities,” said chief executive David Duffy.