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NAB's Clydesdale Bank float and demerger is worth $3.2 billion

Photo: Chip Somodevilla/Getty Images

The NAB’s final price for the IPO and demerger of its troubled Clydesdale Bank values the UK business at $3.2 billion

The 180 pence per share price — at the lower end of expected value — implies a market capitalisation of £1.583 billion ($A3.221 billion) and a return of about $A805 million to NAB from the float.

The IPO represents 25% of Clydesdale. The rest of the shares went to NAB shareholders.

“The successful conclusion of the demerger and IPO of CYBG is a significant milestone for NAB that will enable us to pursue our own focused strategy in our core markets in Australia and New Zealand as we drive towards our vision of becoming Australia and New Zealand’s most respected bank,” says CEO Andrew Thorburn.

NAB will trade ex Clydesdale on the ASX today. The Clydesdale shares are expected to trade on the London Stock Exchange today and on the ASX tomorrow.

The listing was delayed 24 hours after a rating agency, not named by the NAB, asked for financial information relating to Clydesdale.

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 IPO. 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.

The 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.

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