Its parent, National Australia Bank Group, today released interim results for its UK operations which include Yorkshire Bank and its Glasgow-based sister, the Clydesdale.

The figures, covering the six months to March 31, show profit before tax up 17 per cent to £194m with cash earnings up 18 per cent to £139m.
Retail deposits and longer term funding covered 85 per cent of the bank's lending, up from 83 per cent.

NAB said the two banks had shown five consecutive halves of flat costs with cost income ratio improving two per cent on the March 2007 half.

Average retail deposit volumes increased 17 per cent to £17.5bn while average gross loans and acceptances increased 31 per cent to £30.6bn.

Lynne Peacock, chief executive, described the figures as "a stand-out trading performance in turbulent market conditions".

She continued: "We have delivered another set of excellent results.

"Operating a traditional banking business with a consistent strategic direction and disciplined approach to risk, we have achieved strong volume growth in deposits and high quality lending whilst maintaining one of the strongest capital ratios in UK banking.

"Retail performed well in challenging conditions whilst business banking through our maturing integrated Financial Solutions Centres again delivered an outstanding performance.

"We are very proud of our achievements over the past three years. Well prepared for the challenging market conditions in which we operate, our business continues to demonstrate strong sustainable growth and profit momentum."

The bank said a three-year salary deal had been successfully negotiated with the trade union Unite in the period which provided both staff and the business "with stability and assurance at a time of economic uncertainty".

It said that is support of its goal of being carbon neutral by September 2010, a number of initiatives had been implemented.

These included re-engineering printed branch reports and enabling personal computers to be powered off from a remote location to reduce wasted energy and save costs.

Smart Boxes, which measure energy consumption, had been introduced across the bank's property network to further identify opportunities to reduce energy consumption.

Ms Peacock added: "The business is built on solid foundations and is starting to outperform the market. Across the business it is well placed to continue the growth story.

"These foundations provide an excellent platform for the future."