NAB shareholders hit with double whammy

Thousands of NAB shareholders have copped a double hit to their investment portfolios this month as their market exposures to the embattled bank and a listed ghost from its past have been crunched on the ASX.

The NAB share price touched a six-year low of A$23.32 earlier this week and is the worst performing major bank stock on the ASX in the last 12 months.

It almost looks as if a perfect storm is in prospect for NAB's embattled chief executive, Andrew Thorburn.

However, the bank's long-suffering shareholders were given another reason to reach for the heart pills on Wednesday after another tide of bad news washed in from the United Kingdom.

While NAB no longer owns retail banking assets in the UK, more than 100,000 of its Australian shareholders received ASX-listed shares in the entity that has owned the Clydesdale and Yorkshire banks since they were demerged from the group three years ago.

The value of those shares plummeted 20 per cent yesterday after Clydesdale's owner -CYBG PLC - revealed it had taken another big provision to compensate thousands of customers for mis-selling credit insurance to borrowers.

The new £150 million provision shocked the market because CYBG had already put aside approximately £150 million earlier in the year to cover the issue.

These massive provisions crunched the full year earnings result of the company, which was reported as a loss of £145 million.

The ASX-listed scrip of CYBG was pummelled when the market opened on Wednesday morning and closed down 20 per cent to a record low of $3.59.

CYBG is dual-listed on the London and Sydney exchanges, with Australian investors accounting for around 50 per cent of the company.

A large proportion of CYBG's Australian shareholder base also holds NAB's underperforming scrip.

It's a double whammy for such investors that is almost guaranteed to stoke hostility and disquiet at the annual shareholders' meeting in Melbourne on 19 December.

Given that Thorburn is required to give evidence to the Hayne royal commission next week there is always a chance that the NAB board might not require him to make an appearance at the meeting.

Thorburn is probably the most vulnerable of the major bank CEOs to a grilling by the commission on what he knew about the fee for no service scandal and other debacles highlighted by the inquiry.

However, a fair measure of his vulnerability also stems from NAB's woeful share price performance: the bank remains the industry laggard on this critical metric.

Since hitting a peak of more than $33.23 in October 2017, NAB's market value has slumped 30 per cent as investor support for the company has buckled.

To put that performance in a clearer perspective the share price of the country's most strife-torn bank - CBA - fell by only 14 per cent in the same period.

CBA's share price peaked at a three-year high of $87.74 in May last year before the Austrac scandal ripped through the organisation.

But at Wednesday's closing price of $70.06, CBA's share price decline is still much less severe than the falls experienced by NAB stakeholders.

While there's plenty that could be said about the factors driving the NAB share price slide, the biggest talking point in the market is about Thorburn - and whether institutional shareholders are prepared to stomach another instalment of damaging revelations and apologies.