National Australia Bank (NAB) has announced it is considering a stock market flotation of its UK operations, Clydesdale and Yorkshire banks, as part of its exit from the UK market. The Melbourne-based bank stated it is examining all options for the division, which includes over 320 branches.
The news came as NAB reported a 1.1% drop in net profit to A$5.3bn (£3bn) for the year to September, primarily due to issues in its UK business. Cash earnings fell 9.8% to $5.18bn. Chief executive Andrew Thorburn said: 'We have an intention to exit the UK... What we are signalling is that's our intent, it is an absolute priority.'
NAB's UK division has been hit by significant costs, including £420m in Payment Protection Insurance redress and £250m set aside to compensate businesses mis-sold complex financial products. Despite these charges, annual pre-tax earnings at Clydesdale and Yorkshire rose 90% to £203m, helped by a 49% drop in bad debts to £80m.
Mr Thorburn, who took over in August, has already announced plans to list NAB's US operation, Great Western Bank, on the stock market. However, market conditions may delay a UK flotation, as recent volatility has led Virgin Money and Aldermore to postpone their own planned listings.
