National Australia Bank Plans Cut-Price Spinoff of U.K. Business

National Australia Bank Group Ltd said on Monday it plans to spin off its U.K. business at a cut-price valuation in early February.

NAB proposed an initial public offering price of between £ 1.75 and £ 2.35 per share for CYBG PLC. The pricing values the business up to £ 2.07 billion. This is still well below what the bank values the U.K. unit at on its books.

Last year NAB outlined plans to hand 75% of the U.K. business to shareholders and sell the remainder to institutional investors via an initial public offering. The bank was to focus on its more-profitable operations in Australia and New Zealand.

NAB plans to list the shares on Feb. 2. However it warned on Monday that it "may elect not to proceed with the IPO or to only proceed with a partial IPO."

NAB bought Glasgow-based Clydesdale Bank in 1987 for £ 420 million (US$598 million) before picking up Yorkshire Bank in 1990 for about £ 900 million.

The businesses were hit hard by soured property loans and rising funding costs as the U.K. struggled through recession. In recent years the division has racked up provision charges for legacy misconduct allegations for wrongly selling certain financial products.

Write to Max Colchester at max.colchester@wsj.com

(END) Dow Jones Newswires

January 18, 2016 06:25 ET (11:25 GMT)

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