Clydesdale’s chief to step down ahead of sale by Aussie parent

A SUCCESSOR to outgoing Clydesdale Bank boss, David Thorburn, is expected to be named within a couple of months by parent National Australia Bank (NAB) to smooth the way for a possible flotation of the business later in 2015.

David Thorburn was unwilling to commit to a further five years with Clydesdale. Picture: Dan Phillips

It comes after the bank announced yesterday that Thorburn, a Clydesdale veteran who has overseen two strategic restructurings of NAB UK, which also includes Yorkshire Bank, would be stepping down and a search for a successor was “well under way”.

Headhunter Korn Ferry has been handling the search for a new chief executive, and it is understood to be focused on external candidates.

Thorburn’s resignation comes nearly four years after he became chief executive, having joined Clydesdale Bank in 1993 and been appointed to the executive leadership team in 2002.

However, in recent years NAB UK has been hit by lower profits and major fines for wrongdoing that has led its Australian parent to seek an exit, culminating last autumn in NAB saying selling or floating the UK arm was an “absolute priority”.

NAB Group’s profits were hit last year after Clydesdale and Yorkshire banks’ write-down for mis-selling payment protection insurance (PPI) leapt to £420 million from £75m – with the Financial Ombudsman Service warning yesterday that UK banks will be paying out PPI compensation for years to come, having already set aside £24 billion to deal with the issue.

Thorburn said that after talks with the parent company, and with plans for a divestment of the UK business publicly declared, he had decided now was the right time to stand aside.

He said he believed a divestment to new owners would “require a five-year commitment from me”, which would have been “a significant undertaking”.

Thorburn said: “I’m proud of the work my team and I have undertaken during my tenure as CEO and I leave knowing that Clydesdale and Yorkshire banks are in much better shape.

“However, having been chief executive for almost four years, I came to the view that it was in the best interests of the business for me to stand down at this time and allow an injection of new leadership to take place.”

Jim Pettigrew, Clydesdale Bank board chairman, paid tribute to Thorburn’s “significant contribution to Clydesdale and Yorkshire banks over many years”, including his completion of a successful UK strategic review in 2012.

Pettigrew said that review was undertaken “to identify the changes needed to deliver sustainable and satisfactory returns from the UK banking business”.

Andrew Thorburn, NAB group chief executive, and no relation, said that “David has been extraordinarily dedicated to improving the performance of our UK operations”.

He added: “Since our announcement… that we intend to examine a broader range of options to accelerate the exit from our UK banking business, David and I have been having ongoing discussions about the future.

“David’s decisions is understandable given what is now required.”

David Thorburn’s basic salary last year was £450,000, while his total remuneration including bonus and benefits was £955,000.

A Clydesdale spokesman declined to comment on whether David Thorburn would be receiving a payoff, although he is staying on for a period to ease the management transition.

l Taxpayer-backed Lloyds Banking Group boss Antonio Horta-Osorio is understood to be in line for shares worth more than £7m under a three-year deal scheduled to pay out in the coming weeks. Horta-Osorio is on a £1m basic salary.