Clydesdale produces horror demerger review
National Australia Bank yesterday produced an abundance of data on the compromising back story to the planned demerger of its Clydesdale Bank subsidiary from the remainder of the NAB group.While NAB's persistent recourse to increased provisions to cater to the defects of Clydesdale are well known, NAB has used the demerger information pack to chronicle details and provide more insight on costs of its UK banking arm.Like many if not all banks in Britain, Clydesdale and NAB are in the midst of a multi-year remediation of the crooked industry-wide system of selling consumer credit insurance.Clydesdale, more than many in the industry, must also compensate thousands of business borrowers lured into inflexible loans.The section outlining "remediation for PPI" claims, to use the UK jargon, relates a tale of rework."Prior to the introduction of the revised PPI complaints handling policy, Clydesdale had processed and closed approximately 180,000 PPI walk-in complaints as at the end of July 2014 out of 226,000 total walk-in complaints received to 30 September 2015. "Clydesdale is reassessing approximately 180,000 previously closed walk-in complaints for potential remediation." Clydesdale said it estimated that "in approximately 60 per cent of cases reviewed, it will either provide redress in cases where redress was previously not offered or provide additional redress to that provided when the relevant complaint was previously closed."As at 30 September 2015, Clydesdale had two sites dealing with PPI complaint handling, one in Glasgow and one in Reading, with approximately 1450 staff, including outsourced providers.A third site near London will "further support remediation and the past business review," NAB said.There is a conventional narrative of profit, capital and market share, the latter a mix of the encouraging and its opposite.Clydesdale's business banking market share in Scotland is 14 per cent and an SME share of eight per cent "in core regions". But the deposits share in core regions is only 3.8 per cent.The leverage ratio is 7.1 per cent.