Comment: Clydesdale woes | Quarries consolidation

NO GOOD deed goes unpunished. Clydesdale Bank, which spearheads the UK arm of National Australia Bank, put in an improved handling system for investigating complaints about the mis-selling of payment protection insurance (PPI). And it has proved so successful that Clydesdale, which also includes Yorkshire Bank, has had to hugely increase its latest provision for PPI to £420 million from £75m flagged up in August.

Martin Flanagan

That’s a more than five-fold increase in just two months. Rubbing salt in the wound, NAB announced yesterday that the UK arm is also having to push up its provision for mis-selling arcane interest rate hedging products to small businesses to £250m – a near-50 per cent increase on the £170m hit flagged up in August.

Thinking of the £250m Tesco accounting scandal in another sector, and sometimes massively increased efficiencies wrung out of businesses in takeovers and new strategy programmes, it sometimes makes you wonder whether corporates live in a totally different financial world to the rest of us. Financial latitudes of target and performance of hundreds of millions of pounds are commonplace.

It takes the total Clydesdale and Yorkshire have set aside for these two examples of mis-selling to £1.2 billion – a drop in the bucket compared to the charges taken by Britain’s big clearers, but still enough to further furrow the brow of the banks’ parent back in Australia.

NAB must feel it has three children: two upstanding, clean-nosed boy scouts who do their homework and help customers across the road in the shape of the core Australian and Kiwi franchises; and a hormonal teenager in the UK, maxing out the credit card, tripping up while out running around with a commercial lending fast crowd, and periodically bringing mis-selling provisions dirty washing home.

Clydesdale, in truth, is right to have stepped up its game in compensating customers wrongly sold PPI and hedging products. The way to regain public trust is to grab the bull of redress by the horns.

And NAB Group chief executive Andrew Thorburn is to be congratulated on dealing with the issues of transparently. But it is inevitable that the scale of the jump in provisions will raise eyebrows in the short-term as to whether there is anything more in the cupboard farther down the line.

Breedon’s aggregate gain north of Border

INTERESTING timing of the acquisition by Breedon Aggregates, the UK’s biggest independent aggregates business, of Barr Quarries, the market leader in south-west Scotland – after the No vote victory in the Scottish independence referendum.

Breedon already had a strong presence in Scotland, but its chairman Peter Tom said specifically of the £21m Barr acquisition: “With the uncertainties surrounding the independence issue now behind us, we believe our prospects north of the Border have never been brighter.”

Barr gives the English company a fifth self-contained business within Scotland, with enough mineral reserves and resources to last about 70 years at current rates of extraction. Its operation will run seamlessly from Hebrides to Gloucestershire.

But it makes you wonder how much more cross-Border industrial consolidation may happen that might not have got off the drawing board if the Yes vote had won the independence campaign and frightened off inward investment by “foreign” English companies.