NAB is tumbling.
The bank’s shares were sold down hard as the big four bank traded ex-IPO and demerger of its troubled UK business Clydesdale Bank.
At the close, they were down 5.5% to $26.36, accounting for about 20% of the sharp fall on the ASX today.
Investors were marking NAB down as the value from the UK bank departed the local business into an IPO and into the hands of NAB shareholders. The other local big banks were also being sold down with the ANZ down 2% to $23.840.
The $3.2 billion float is part of the NAB’s strategy to get rid of non-performing assets and concentrate on the business in Australia and New Zealand.
Last year the bank completed the sale of the final holding in the Great Western Bank in the US, the $2.4 billion sale of 80% of the insurance business and the sale of most of the NAB’s commercial real estate portfolio.
Part of the reason why NAB raised $5.5 billion last year, the biggest capital raising in Australian company history, was to support the UK float and demerger. The other reason is to meet stricter capital rules designed to make Australian banks safer from any future financial crisis.
UK authorities require capital support of £1.7 billion ($A3.6 billion) to cover any future claims against the business for “miss-selling” insurance products to small businesses.