Value cut amid market turmoil
Clydesdale priced at £1.5-£2bn for forthcoming flotation
National Australia Bank has priced the flotation of Clydesdale and Yorkshire banks at between 175p and 235p per share, valuing the new business at between £1.54 billion to £2.07bn.
An investor roadshow begins today and the final price is expected to be announced on 2 February when dealing will begin on London Stock Exchange’s main market.
The price range is, as predicted, lower than the initial forecast to take into account recent turmoil on world stock markets. It was initially expected that the bank would be valued at beween £2bn and £2.5bn.
The initial public offering will restore Clydesdale’s independence for the first time since it was acquired by Midland Bank in 1920. It was sold to NAB in 1987.
The flotation has been long debated and was finally put on the agenda last summer when new NAB chief executive Andrew Thorburn took control of the Melbourne-based group.
Although not immune from the banking debacle of 2008 its systems already operate on a standalone basis, so it does not include the hefty separation costs and complex technology separation involved with the carveout of TSB from Lloyds Banking Group.
In an update on Thursday it said it continues to gain business and personal customers. Referring to the holding company for Clydesdale and Yorkshire Bank (CYBG) it said: “Trading in the 3 months to 31 December 2015 has been in line with the CYBG board’s expectations.
“The CYBG Group continued to acquire personal and business current account customers, with 28,930 accounts opened, delivering net growth in the period.
“Momentum in the loan book has been maintained, with 6.6% annualised growth in mortgages during the period with good growth in owner occupied. Core SME lending balances were stable, and the run off of non-core business lending continued as planned.”
Net interest margin was stable and in line with guidance at 2.20% annualised, it added.
NAB intends that 75% of the floated bank will be distributed to its shareholders with the remaining 25% sold to institutions.
The group has 275 retail branches comprising 121 Clydesdale Bank and 154 Yorkshire Bank. There are 40 business centres.