Ominous indication of more redundancies to come at Clydesdale?
Clydesdale and Yorkshire banks (both owned by National Australia Bank), intend to make 17% of their staff, or 1,400 people in the UK redundant by 2015. Scottish staff seem likely to get off lightly: only 60 of those jobs are expected to be lost in Scotland, where two back office locations are being closed. Fortunately for Scots staff, Clydesdale plans to focus its attention on Scotland and Northern England and to pull back from the South.
However, writing in the Herald on Sunday, Scots financial services journalist Ian Fraser, questioned whether the cuts already announced will be enough. Fraser quoted Ben Zucker, an analyst at Commonwealth Bank in Australia who said (densely): "While separating NAB UK into core and non-core along with sizable below-the-line charges was largely expected, the provisioning top-up for UK commercial real estate was less than hoped for, and in our view, not enough to convince most that UK risk is now well ring-fenced."
As Fraser points out, Zucker thinks there will be more pain to come at Clydesdale. The bank still has a massive £6.2bn of troubled commercial property loans, £500m of which have already been declared bad and doubtful and shifted to NAB's balance sheet.
The bank now plans to focus on small business and retail lending, but it's not clear this strategy will succeed. "There are now some very real concerns about the future of the Clydesdale Bank," David Watt, executive director of the IoD Scotland, tells Fraser. "Its continued prosperity is very, very important to the Scottish economy and competition in banking is vital."
