NAB may put Yorkshire, Clydesdale banks up for sale

[TANZARELLI]

NAB may put Yorkshire, Clydesdale banks up for sale

John Penman | January 05, 2009

Article from: Times Online
CLYDESDALE and Yorkshire banks could be put up for sale after the new chief of parent group National Australia Bank launched a wide-ranging review of the business.
Cameron Clyne, who took over from John Stewart as chief executive of NAB on January 1, has signalled his “clear, unambiguous goal” will be to deliver shareholder return.

The banks are thought to be at risk because investors are unhappy with what they see as lower returns from the British operations. NAB shares have underperformed in recent years as Mr Stewart sought to restore its reputation after a foreign-exchange scandal.

Mr Clyne’s review is understood to include all aspects of the business including a possible sale of the British banking interests.

Mr Clyne, 40, has already stamped his authority by taking over NAB’s profit-driving Australian businesses in addition to the group role.

NAB has denied stories saying he plans to move the chief executive’s office from Melbourne to Sydney to be close to institutional investors.

http://www.theaustralian.news.com.au...-36418,00.html

[natweststaffmember]

Re: NAB may put Yorkshire, Clydesdale banks up for sale

It's not profitable for Australian Investors

[Amethyst]

Re: NAB may put Yorkshire, Clydesdale banks up for sale

http://www.fsa.gov.uk/pubs/other/undertaking_nab.pdf

couldnt see this elsewhere on here.

The Home Loan General Offer Conditions gave the Bank three powers to exercise in certain circumstances. Each of the sub-terms in Term 10 ((a) withhold facility, (b) forbid any further withdrawals, and (c) demand immediate repayment) conferred varying degrees of power on the Bank. We were concerned that the exercise of one or more of these powers may have been unfair in certain circumstances, specified in sub-clauses 10.1–10.11. For example:
•
There may be circumstances where the exercise of the power to withhold the facility may have been unfair in the circumstance of, for example, 10.4 (a consumer failing to pay any money due to the Bank or one of the Bank's associated companies). We considered that the term may give too much power to the Bank to withhold the Facility for a relatively minor breach of contract, i.e. failing to pay money due to one of the Bank's associated companies, even if the sum due was a commensurately minor amount.
•
Similarly we were concerned with the power to demand immediate repayment of the mortgage in certain circumstances, for example 10.1 of the Conditions (a consumer permitting the balance of the account to exceed the then applicable Safety Limit). We considered that the term may give too much power to the Bank to demand repayment of the mortgage for a relatively minor breach of contract, i.e. exceeding the Safety Limit (the consumer's overdraft) even by a relatively minor amount. In our view this may cause a significant imbalance in the rights and obligations of the parties to the detriment of the consumer.
We also had similar reservations about the exercise of some of the powers in some of the circumstances outlined in the Rapid Repay Mortgage (Facility) contract. For example, term 11.7 gave the Bank wide-ranging discretion to demand immediate repayment of the mortgage if, in the opinion of the Bank, the consumer's circumstances or affairs had changed sufficiently to warrant the discontinuation of the Facility. We were concerned that this too may give the Bank too much
discretion to demand repayment of the mortgage and could lead to a significant imbalance in the rights and obligations of the parties to the detriment of consumers.
In drafting their consumer contracts, firms need to consider carefully whether reserving the ability to exercise a power is fair in each and every circumstance (as outlined in the contract). Specifically they should consider whether the ability to exercise those powers in each and every circumstance might create a significant imbalance in the contract, which is detrimental to consumers.