CLYDESDALE Bank has completed a stock market flotation this morning after mounting a share sale that valued the business at £1.6 billion, near the bottom of the expected range.

The flotation of the Glasgow-based lender on the London Stock Exchange was originally scheduled for yesterday, when National Australia Bank completed the demerger of Clydesdale and its sister Yorkshire Bank as CYBG.

However, the group delayed finalising plans to sell 25 per cent of the shares in CYBG through an initial public offering to institutions following an intervention by a credit rating agency.

Clydesdale confirmed last night that shares in CYBG would be offered for sale to institutions at 180p each. It said the offer price implied a market capitalisation of approximately £1.583bn for the group.

That represents only around 60 per cent of the £2.7bn book value the group had at 30 September.

Announcing plans last month to sell 25 per cent of the business to institutions, NAB set a price range of 175p to 235p for shares in CYBG. This would have valued the business at around £1.5bn to £2bn.

The remaining 75 per cent of CYBG will be allotted to NAB shareholders.

But CYBG’s chief executive David Duffy said: “This is truly a landmark day for CYBG as we move towards becoming an independent banking group for the first time in almost a century and we are delighted to be listing on both the London Stock Exchange and the Australian Securities Exchange.”

He added: “CYBG is in great shape to begin this exciting new chapter. With the IPO process successfully behind us, all of our energy will be dedicated to delivering industry leading service for our customers and improved and sustainable returns for our new and future shareholders from around the world.”

NAB bought Clydesdale for £420m in 1987. It acquired Yorkshire Bank for around £900m in 1990.

The Australian bank told investors yesterday: “CYBG has received a recent specific request from one of the rating agencies for certain financial information relating to its assessment of Clydesdale Bank's short- and/or long-term deposit rating. “

It added: “ The outcome of this assessment could be a near term downgrade of the short and/or long term deposit rating or the placing of such rating on credit watch with negative implications.”

NAB stressed: “This ratings development may not occur, and should it occur, is not considered material to the financial position and outlook of CYBG.”

Given the timing of the request for information, National Australia Bank and CYBG decided to delay finalising the flotation plans by 24 hours.

Private investors will be able to buy shares in CYBG from firms that subscribe to the IPO and those allotted them in the demerger.