The Australian owners of the Clydesdale Bank have targeted February for its debut as an independent lender on the London Stock Exchange.
National Australia Bank (NAB) has long been planning splitting off its previously troubled UK bank business, while its UK management is confidently looking forward to standing on its own two feet as an independent bank for the first time since 1920 when it was first acquired by Midland Bank.
NAB said it plans to give about 75% of the shares in the Clydesdale and Yorkshire banks to existing NAB shareholders and sell the remainder to institutional investors. Clydesdale will be listed in Australia and London.
Clydesdale chief executive David Duffy explained that the new timetable suited the pace of the bank.
He said: “The group long range forecast was to do it by the year end. You’ve got Christmas popping in their and January is the first month of the new financial year for investors, so it is logical to do it and price in the early part of February.”
In its results for the year to 30 September 2015, the bank was hit by a further £465million charges for mis-sold products like PPI and structured business products.
NAB has had to cough up £1.7billion capital support package to ensure the new, separate bank can meet “potential future legacy conduct costs” – a requirement by the banking watchdog, the Prudential Regulation Authority (PRA).
Mr Duffy said he was confident that the issue of repayments for mis-selling was “behind us”.
“We are pretty comfortable with that level of indemnity and we are pretty confident that issue behind us,” said Mr Duffy.
He said the bank and its staff were now looking forward to the future.
“I was on a call with thousands of the staff this morning. The fact is we have been talking about it but now it is real.
“There is a real sense of excitement. Controlling your own destiny in terms of what you deliver to customers – that freedom and flexibility is what we are focused on.”
He addressed speculation that, once independent, the bank might either be a buyer or the UK’s rising “challenger” bank brands – or a seller.
“We’ll be the one bank that is the largest and the only full service retail and SME bank, with 3million customers and £30billion of assets. We are the biggest and most complete challenger,” he said.
“People have started thinking that maybe the biggest dog in the park should be doing the consolidation.
“Equally others think since we are delivering such a good quality bank, others may want to buy it.
“I say look – all the above can happen but our focus is to deliver shareholder value and customer improvement.”
Mr Duffy, who became CEO in June, said the shares will probably be sold at a discount to book value, which is estimated to be between £2-£2.5billion and will be finalised later in the process.
Customer lending up 4% to £28.7billion year-on-year while deposits rose 10.3 % to £26.3billion.