National Australia Bank has decided to proceed with a demerger and initial public offering of the Clydesdale and Yorkshire banks.
In a stock exchange announcement today (27 November) National Australia Bank stated it will release detailed information on its planned exit from its UK banking business early next month.
A scheme booklet, including the impact of the exit on the Australian bank and its UK business, is expected to be released in the week beginning 7 December, NAB said on Friday.
NAB has said it will seek to spin off about 75 per cent of Clydesdale and Yorkshire banks to shareholders and sell the rest to institutional investors through an initial public offering planned for February.
The move is part of the lender’s efforts to focus on more profitable core operations. It has already floated US bank Great Western Bancorp.
It was back in May that National Australia Bank confirmed its plans to offload the Clydesdale and Yorkshire Bank subsidiaries, adding that it was instructed by the Prudential Regulation Authority to set aside a further £1.7bn for potential redress.
At that time the preferred public market exit option is a demerger of 70 to 80 per cent of NAB Europe and Clydesdale to NAB shareholders and a sale of shares in an IPO of the remaining balance of 20 to 30 per cent to institutional investors.
NAB believes a demerger would accelerate a “full exit, delivering greater certainty than a full IPO alternative and NAB shareholders can retain potential upside”.
It added: “This is a substantial and complex undertaking, subject to risk and addressing a number of issues of which the most substantive is conduct mitigation.”
emma.hughes@ft.com
