Demerged Clydesdale and Yorkshire banks to invest in technology and digital banking

National Australia Bank finally gets round to offloading Clydesdale and Yorkshire banks

The Clydesdale and Yorkshire banking group, currently owned by National Australia Bank (NAB), is planning a major investment in new IT when it is demerged later this year.

NAB plans to exit the UK retail banking sector and has decided on a demerger of around 70 per cent of the business, which will be handed over to NAB shareholders in order to expedite the process. The balance of the business will be floated in an IPO, with an "exit date by [the] end of 2015, subject to market conditions", according to NAB. The IPO will help pay for the estimated £1.7bn that NAB will be required to pump into the demerged banking group to cover potential costs.

The demerged business, however, has plans to invest in more digital developments, according to the announcement made today.

"Support for customers will continue to be at the heart of our business. More efficient distribution channels, significant investment in technology, digital banking, brand awareness and innovative products will ensure this positive momentum continues," said Debbie Crosbie, acting CEO of the newly created banking group.

Like many banking groups, Clydesdale and Yorkshire may soon start to feel the competitive pinch from non-traditional banking groups. Rivals are also looking to relieve the burden of legacy in-house IT as new regulations start to take their toll, especially in the mid-market banking sector across Europe.

The banking group has appointed John Shovelin as operations and IT director during 2014 in preparation for a demerger or IPO of the Clydesdale and Yorkshire bank combination. Shovelin joined IBM after graduating from Strathclyde University with a degree in computer science, rising to the position of information systems manager for the IBM PC company in EMEA, before joining National Australia Group, NAB's parent company, in 1998.

Shovelin will be in charge of the combined banks' IT strategy, which is already merged at the backoffice level.

"His role combines responsibility for all aspects of technology for Clydesdale and Yorkshire Banks; including service delivery, strategy and architecture, application development and maintenance, information security, as well as the main processing areas of the UK Banks' back office services including, retail and business processing services, payments, cash, clearing services statement and letter production, and procurement," according to his biography.