CLYDESDALE Bank's interim chief executive Debbie Crosbie is confident a stock market flotation of the lender can be completed before the end of this year.
Owner National Australia Bank confirmed it plans to exit the UK banking market through an initial public offering of its operations here.
That will see it offer between 20 and 30 per cent to institutional investors with between 70 and 80 per cent retained by NAB shareholders.
That came as the UK banking arm, which covers Clydesdale, Yorkshire bank and some wealth management, reported a 33 per cent rise in underlying half-year earnings to £118 million.
That was helped by a £2.4 billion rise in mortgage lending while gross loans were up £1.3bn, or 4.9 per cent, to £28bn in the six months to the end of March.
The bank also said it is seeing net growth in its current accounts and plans to launch an enhanced digital offering this summer.
There was also a reduction in bad and doubtful debts and no further provisions for legacy misconduct issues. Clydesdale was last month fined a record £20.7m by the Financial Conduct Authority for the way it handled Payment Protection Insurance complaints.
The growth in lending in the period was tempered by a £1.1bn fall in business loans and generally weaker demand for credit although the bank said part of the decline was expected.
Ms Crosbie said: "That is part of the strategy to come out of assets where we can't compete and get the returns we need.
"We have done £500m of new SME lending in the first six months in the areas we really want to compete in.
"In the same way as we have put out a really interesting offer on personal current accounts we have a 25-month free day to day banking offer for start-ups with less than £2m turnover. We are already seeing net growth in the few weeks that offer has been out so it is a real positive for our SME business."
A further 19 branch closures were announced, including eight in Scotland, although all staff involved are being offered the chance to go to alternative locations.
The bank announced last year it was shutting 28 branches but would invest £25m in overhauling its high street network.
Ms Crosbie confirmed a trial in Aberdeen to provide personal, commercial and private banking under one roof is just getting started with several other branches getting facelifts before the end of the year.
On the half-year results she said; "I think most people will agree it is a really good start with a good foundation to build a standalone bank.
"I think the strategy is beginning to work and we are really starting to see momentum in the business."
The demerger and flotation of the UK business was described as a "priority" by NAB chief executive Andrew Thorburn although he said the group was still open to the possibility of a trade sale.
Ms Crosbie is confident a flotation can be completed before the end of this year and said: "We are very well prepared. You wouldn't expect us to make the type of announcements we have made without a huge amount of work and a lot of water already under the bridge.
"I'm very optimistic that the calendar year end is a very doable time table."
Ms Crosbie admitted that mistakes of the past remained "front of mind to fix" but believes the bank is making progress reconnecting with customers.
Regulators have already asked NAB to provide up to £1.7bn for the floated bank to cover misconduct charges relating to PPI and various types of complex business loans.
To help facilitate that and keep its own balance sheet strong NAB is doing a A$5.5bn (£2.87bn) capital raising, the largest in Australian corporate history.
Ms Crosbie described the £1.7bn is "an important safety net for the future and said: "[It] gives us real confidence we can execute this transaction in the time given and feel really good about our stand alone future.
"The bank has made great progress but there is more to do and we are not complacent. I really feel this is the start of something quite exciting."
Ms Crosbie would be in favour of staff being given the opportunity to buy shares in the flotation but said there was still work to be done to decide what form that may take.
Ms Crosbie indicated incoming chief executive David Duffy, who is leaving Allied Irish Banks, is expected to formally join Clydesdale in June.
Called to Account: Page 30
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