US assets sale reignites Clydesdale Bank questions

Clydesdale Bank: Asset sale. Picture: Jon Savage

National Australia Bank (NAB) said it would sell a minority stake in Great Western Bank through an initial public offering (IPO) towards the end of this year, and it would ultimately seek to divest itself of 100 per cent of the business “subject to market conditions”.

Chief executive Andrew Thorburn, said the move was in line with NAB’s strategy to “focus on its core franchises in Australia and New Zealand”.

Thorburn, who recently succeeded Cameron Clyne as chief of the Melbourne-based group, added: “We have been clear that our strategic direction is to concentrate on building a stronger core Australian and New Zealand business and improving the experience for our customers. The IPO of the Great Western Bank provides us with the opportunity to further focus our attention on our core business.”

Thorburn – no relation to Clydesdale chief executive David Thorburn – was reported in the Sydney press earlier this month as saying the group’s UK business, which includes Yorkshire Bank, was a “non-core asset”, fuelling speculation of a possible withdrawal from the UK.

NAB has also warned that a Yes vote in next month’s independence referendum could bring with it a “significant” rise in costs.

At the time of the firm’s third-quarter trading update, Thorburn said: “We continue to closely monitor the situation and have appropriate contingency planning in place.”

The alert came as NAB said that Clydesdale faces an additional hit of at least £245 million to cover the cost of mis-sold loan insurance and complex interest rate swap products.

A spokesman for Clydesdale said the Glasgow-based lender would not comment on market speculation.

Deutsche Bank Securities and Bank of America Merrill Lynch are acting as joint book-runners and underwriters for the Great Western Bank IPO.