Yorkshire Bank to float after Australian owners reveal exit plans
YORKSHIRE BANK is to be floated on the stock market as its owners, National Australia Bank (NAB), confirmed its plans to demerge its UK business.
NAB has been publically planning to exit the UK market for some time after the banking crisis and its consequences caused a continued drag on the group’s profits.
Its UK business, which includes Clydesdale Bank, will be floated later this year – “subject to market conditions”, it said – with NAB shareholders receiving 70-80% of the shares and the balance being sold to institutional investors in an IPO.
The plans are subject to a number of approvals, including UK and Australian regulators, the group’s boards and shareholders.
NAB expects that it will need to provide capital support of up to £1.7bn to the demerged company to cover “potential losses related to legacy conduct costs”, which include claims around payment protection insurance (PPI) and interest rate hedging products.
Last month the Financial Conduct Authority fined Yorkshire Bank £20m for the way it handled PPI complaints and for providing false information to the ombudsman during its investigation. The FCA estimated that one-in-three of the 126,600 PPI claims the bank received in a two-year period may have been rejected unfairly while a further 50,900 potentially received “inadequate redress”.
Acting chief executive Debbie Crosbie believes this announcment is “the beginning of an exciting new opportunity” for Clydesdale and Yorkshire Banks.
She said: “Our performance is improving and we’re providing real customer choice in the UK which is driving encouraging growth across our target retail and SME markets.
“We believe the foundations of a strong standalone future have been laid in the
progress made restructuring and refocusing our business and this is clear in our half year results.
“The strong start we’ve made since the beginning of 2015 means we’re well placed to build on our organic growth plans.”
NAB’s UK banking operations saw pre-tax cash earnings increase by one-third to £118m, charges to provide for bad and doubtful debts more than halved, to £24m, and mortgage lending increase by £2.4bn.
Yorkshire Bank has an operation in Birmingham, based in Temple Row.
