Clydesdale warns on vote for independent Scotland

Clydesdale bank has warned that an independent Scotland might damage its business. The company, which owns Yorkshire bank, also said on Monday that it would have to make much higher provisions for mis-selling payment protection insurance (PPI).

In the first warning by a foreign bank on the referendum, its parent group, National Australia Bank (NAB), said: “A vote in favour of independence may give rise to significant additional costs and risks for Clydesdale. We ... have appropriate contingency planning in place.”

NAB’s new chief executive, Andrew Thorburn, said: “Our UK operations still face a number of challenges.”

He also revealed for the first time that Clydesdale is now subject to an enforcement process by the Financial Conduct Authority (FCA) over the way in which it handled PPI complaints in the past. This is expected to mean a provision of “at least £75m” on top of the £386m that Clydesdale has already allowed for PPI mis-selling. It could face further FCA penalties if it does not start handling complaints properly.

The bank was fined £8.9m last year for mortgage errors.

Clydesdale also said it would double its provisions, to £350m, for interest rate hedging products sold to small firms.