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Clydesdale and Yorkshire to join ranks of challenger banks

CYBG wil be spun off next February with 75% handed to sahresholders of parent NAB
Clydesdale and Yorkshire to join ranks of challenger banks
NAB intends to distribute 75% of CYBG to its shareholders

After a rush of new names in the challenger banks space, two of the country’s most venerable lenders are returning to the stock market to take their chance.

Through a spin-out by parent National Australia Bank, CYBG, a holding company for Scotland-based Clydesdale and Yorkshire Bank, intends to float in London next February.

Between them, the two banks have accumulated 2.8million retail and business customers and a loan book of £28.8bn that includes £20.5bn in mortgages.

NAB intends to distribute 75% of CYBG to its shareholders with the remaining 25% to be sold to institutions.

The money raised will complete a re-building that has been underway since 2012 after expensive commercial property lending mistakes and PPI mis-selling costs.

David Duffy, chief executive, said:  "We are in a good position as we move into this exciting new period as an independent bank.

National Australia Bank is pulling back to focus on its home market, but Duffy believes Clydesdale and Yorkshire’s position as a full service bank offering clearing, and serving small businesses as well as consumers puts it ahead of the new breed of challengers.

“Much has been done to re-shape and strengthen the business; supporting our plans for growth by building a better bank for customers.”

Having turned Allied Irish Banks in his previous job, the focus now is on growing Clydesdale and Yorkshire in new areas where its markets share is a fraction of that in its heartlands.

The broup has 275 retail branches (121 Clydesdale Bank-branded branches and 154 Yorkshire Bank-branded branches) and 40 business centres, but the emphasis is likely to be on the evolving digital platform. 

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March 12 2009
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