(Reuters) - CYBG Plc (L:CYBGC), the lender spun off from National Australia Bank (AX:NAB), reported a 2.3 percent rise in net interest income for the nine months to June and said it expects to meet its full-year expectations.
The Glasgow-based company, whose brands include Clydesdale Bank and Yorkshire Bank, said trading in three months to June 30 was in line with its expectations and that it was targeting a "modest" inaugural dividend for the current year.
The bank said underlying operating costs for the full year would be below 680 million pounds -- at least 10 million pounds lower than previously thought.
Shares in the company were up 6.6 percent at 0735 GMT, making them the top gainer on FTSE 250 (FTMC) index.
CYBG's mortgage book grew to 22.8 billion pounds by June 30, from 22.4 billion pounds at the end of March 2017.
CYBG said its net interest margin rose to 229 basis points in the nine months to June from 226 basis points in six months to March, as deposit repricing help offset asset yield pressure.
CYBG said in September that it would invest more than 350 million pounds over the next two years to reduce costs and increase efficiencies in a tough trading market.
The company is targeting more than 100 million pounds of sustainable cost reductions by 2019.
Common equity tier one capital ratio - a key measure of financial strength - slipped to 12.4 percent at June 30 from 12.5 percent in March on restructuring costs.
($1 = 0.7570 pounds)