The National Australia Bank is floating the Clydesdale and Yorkshire Bank, and shares are due to start trading next week
Clydesdale and Yorkshire Bank is set to become an independent lender at the start of February, as shareholders in its parent group have voted to sell the institution.
The National Australia Bank has owned Clydesdale since 1987 but now wants to spin off the lender.
NAB’s own shareholders will get 75pc of the new bank’s stock, with the remaining 25pc being sold to new investors.
The parent bank’s chairman, Ken Henry, explained the decision to investors before the vote, and told shareholders that the UK bank struggled in the wake of the financial crisis.
“Clydesdale Bank has been a significant factor in NAB shareholder returns not being at the level that we have wanted, nor competitive with our Australian peers,” he said.
“Post-demerger, NAB will be focused on our Australian and New Zealand core businesses, which have historically delivered higher return on equity and capital generation than our overseas operations.”
Bosses at the bank set a price range for the stock which values the bank at between £1.5bn and £2bn, equating to between 50pc and 75pc of its book value.
In part, that low price is a result of choppy markets since the start of the year, which make it difficult to launch an initial public offering of shares.
The final price is scheduled to be announced on February 2, with conditional trading on the London Stock Exchange beginning that day, and trading on the Australian Securities Exchange on February 3.
The demerger will be fully implemented on February 8, according to the bank’s proposed schedule, at the same time as unconditional trading begins.