Partner Article

NAB considers IPO for UK subsidiaries Yorkshire and Clydesdale banks

National Australia Bank, parent of Yorkshire and Clydesdale, has iterated its intention to get rid of its UK banking presence, potentially in an IPO, as with Great Western Bank earlier this year.

Their final year results show that their UK banks have been dragging the group as a whole down, due to the impact of higher UK conduct provisions, and R&D tax policy change as well as prior period UK conduct charges relating to PPI.

NAB also announced profit figures for Clydesdale and Yorkshire. Annual pre-tax earnings rose by 90% to £203 million, helped by a 49% drop in bad debts to £80 million.

Last month the bank said that redress for Payment Protection Insurance mis-selling would cost £420 million for the financial year just ended, much greater than the £75 million announced in August.

Expenses rose 21% for the year because of these, but without the UK bank expenses expenses rose 4.5% over the year, with revenue falling 1.4%.

NAB Group chief executive Officer Andrew Thorburn said: “While our Australia and New Zealand franchises are in good shape, it is disappointing to record a full year result that includes $1.5 billion after tax in UK conduct provisions and other impairments.

“We know there is value in focusing on the core business and in building a strong Australian and New Zealand franchise with real clarity around a customer-focused strategy that is executed well. Our Executive Leadership Team is focused on delivering a better experience for our customers and better returns for our shareholders.

“Pleasingly we have also made good progress on legacy assets and have been able to accelerate our exit from non-core businesses.

“In July we announced the partial sale (£625 million) of the NAB UK CRE portfolio and in October began the sale process of Great Western Bank with the IPO of a 31.8% stake.

“Our clear focus is on our Australian and New Zealand franchises and providing a better customer experience, and as a result we need greater urgency dealing to our remaining low returning assets.

’In relation to exiting UK Banking this means we are now examining a broader range of options including those provided by public markets.“

This was posted in Bdaily's Members' News section by Clare Burnett .