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National Australia Bank values UK unit Clydesdale at up to $3 billion

NAB said it planned to quit Clydesbank Bank in 2014 after a backlash over methods used to sell loan insurance
NAB said it planned to quit Clydesbank Bank in 2014 after a backlash over methods used to sell loan insurance

National Australia Bank Ltd, the country's biggest lender by assets, has valued its UK unit, Clydesdale Bank, at up to  A$4.3billion ($3 billion), according to IPO pricing terms. 

NAB, which bought the business in 1987, said it planned to quit the 177-year-old British bank in 2014 after facing a consumer backlash over methods used to sell loan insurance. 

It is planning to sell 25% of the unit in an initial public offering and spin off the rest to its shareholders. 

The unit's shares are slated to be listed on the London stock exchange on February 2 after final pricing on the same day. 

The Australian lender also said it may choose not to proceed with an IPO or proceed with a smaller offering, in which case it would retain some ownership in the bank. 

Australia's major banks are feverishly raising cash by issuing shares and selling non-core business units after new rules require them to have a greater amount of cash in reserve as a buffer for their loan books.

n October, NAB sold 80% of its life insurance unitto Japan's Nippon Life Insurance Co for about $1.65 billion. 

Earlier in 2015, it sold US-based Great Western Bank for A$1.5 billion. 

Clydesdale, which is headed by former AIB CEO David Duffy, said last week that trading in the three months to December was in line with expectations.