The owner of Clydesdale and Yorkshire Banks has become the latest business to warn of the risks it faces from Scottish independence, saying a 'Yes' vote could bring "significant additional costs".
National Australia Bank (NAB), which owned Northern Bank until its sale to Danske in 2005, said it had made contingency plans should the referendum next month turn out in favour of a split from the UK.
Clydesdale and Yorkshire Banks saw provisions for dealing with past mis-selling scandals swell to more than £800m as its boss admitted the way it had dealt with payment protection insurance (PPI) claims had "not been consistent".
Changes to this process are likely to result in higher pay-outs and revisions to past compensation, NAB said. The warning on independence comes after Ulster Bank parent company Royal Bank of Scotland reiterated its stance that a 'Yes' vote could have a "material adverse effect" on it.
NAB chief executive Andrew Thorburn referred to the Scottish referendum as one of a number of challenges facing NAB's UK operations – in addition to charges for past conduct.
He said: "A vote in favour of independence may give rise to significant additional costs and risks for Clydesdale Bank. We continue to closely monitor the situation and have appropriate contingency planning in place."
He added that the group would need to take further provisions for the full year for PPI mis-selling compensation as well as for misconduct over interest rate hedging products – complex financial products that were sold to small firms.
NAB reported cash earnings up 7% to 1.6bn Australian dollars (£891m) for the third quarter to the end of June as bad debt charges in Australia and the UK fell. Meanwhile, last month it disposed of £625m of UK commercial property loans.
The group said it expected to make an additional £75m provision at the end of the financial year because of "increased costs of administering the PPI remediation programme". This takes the total put aside for PPI redress to £461m.
Provision for interest rate hedging products will be nearly doubled, with an additional sum of at least £170m set aside taking the total to £350m.
It will take the total running cost for both scandals to £811m.
NAB said on top of this there were also likely to be "significant additional provisions" for PPI as a new complaints handling process is introduced.
This was "likely to lead to increased payments both for new complaints and in revisiting closed complaints", it said.
David Thorburn, chief executive of Clydesdale and Yorkshire Banks, said: "In line with the industry, we continue to deal with legacy issues. The way we've handled historic PPI complaints has not been consistent, and we are committed to putting this right.
"We have already introduced a new PPI complaint handing process, and we will also apply this new process to a systematic and proactive review of all past PPI complaints."