Yorkshire Bank to go for IPO

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”.

Separately, the bank said its 19 branches nationwide – including Blackpool Central Drive, Colne and Stalybridge – are to close.

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.