The National Australia Bank has proposed to sell off its stocks from Clydesdale and Yorkshire banks to focus on Australia and New Zealand accounts.

David Duffy joined Clydesdale Bank as chief executive earlier this year. According to Duffy, "This is another important step towards becoming independent for our Clydesdale and Yorkshire Bank brands." The company’s aim is to provide "sustainable growth to their shareholders," Duffy said.

According to the proposal, NAB will be selling 25 percent of their UK stocks through a stock market float while the remaining seventy-five percent will go towards the existing investors.

The NAB board approved the proceeding with the IPO and demerger last month.

National Australia Bank Chairman Michael Chaney said that after assessing the number of alternatives, the NAB Board considered the demerger as the best exit option. It is also likely to enhance the long-term value for NAB shareholders.

"In recent years, NAB has taken a number of steps and initiatives to strengthen CYBG’s standalone position," Chaney said in a statement.

Shareholders will be coming together on Jan. 27 to cast their votes. They will also be given the opportunity to raise questions to the management.

The demerger will, however, remain conditional in regulatory approvals, shareholder approvals and court approvals.

The demerger and proposed IPO is designed to facilitate strong focus on Australian and New Zealand franchises. The standalone position of the CYBG group has also been strengthened to enable the said separation. The nature of the demerger is in favour of the shareholders, according to Independent Expert, Grant Samuel.

The said proposal is scheduled to be completed in February, and the plan is designed to benefit both parties.

Contact the writer at feedback@ibtimes.com.au, or let us know what you think below.

RELATED STORIES