THE chief executive of Clydesdale Bank, David Duffy, has celebrated the lender regaining its independence after almost 100 years and said it is in good shape to deal with the challenges it may face.

Glasgow-based Clydesdale completed the process which saw the business join the stock market with its sister Yorkshire Bank yesterday, when dealings in the combined CYBG group’s shares went unconditional.

The lifting of restrictions means members of the public can buy stakes in the group, which was spun off by National Australia Bank last week.

It marked the start of a new chapter in the story of a bank that spent decades under the control of firms based outside Scotland.

The story will be followed with keen interest in the country where Clydesdale plays an important role in the economy. The group has around 4,200 employees in Scotland and an extensive customer base including small and medium sized businesses.

Graeme Jones, chief executive of industry body Scottish Financial Enterprise said: “This is an exciting new phase for the Clydesdale Bank, and for the industry in Scotland, as it signals the continuation of a strong home grown banking sector, equipped to embrace change and meet the challenges of the future.”

However, CYBG has expressed concerns about the possible consequences of the UK voting to leave the EU and the implications of such a result for the debate about Scottish independence.

As CYBG is the first bank with headquarters in Scotland to gain a listing on the London Stock Exchange in decades it forms a notable addition to the ranks of quoted companies.

Welcoming the start of unconditional dealings in CYBG’s shares on the exchange, Mr Duffy underlined the importance of yesterday’s events.

“Today, CYBG has become a fully independent banking group for the first time since 1920 and it is a privilege for me to be leading the business at this pivotal moment in its 177 year history,” he said, adding: “I am confident that CYBG starts life as a listed company in great shape.”

The spin off came after NAB completed protracted and costly preparations to exit the UK banking sector by demerging Clydesdale and Yorkshire.

This involved selling 25 per cent of the shares in CYBG to institutions through an initial public offering and allotting the remainder to investors in the Australian group.

NAB had said Clydesdale was a drag on growth based in an under-performing economy and took up too much management attention.

It beefed up Clydesdale’s balance sheet ahead of the demerger.

Mr Duffy said: “Now everyone at CYBG - our Board, the Leadership Team and every one of our employees - will focus sharply on creating an even better bank for our customers and our new shareholders.”

He has noted that CYBG’s customer base makes it the largest of the challenger banks that aim to win share from giants like Royal Bank of Scotland.

The bank will be free to pursue its growth ambitions without having to get clearance from NAB. However, the demerger process is likely to have left Australian institutions with significant holdings in CYBG.

Mr Duffy said: “We are the only UK banking group to have a dual listing in London and Australia and we have an enviably strong and supportive shareholder register which includes blue chip institutions and individual investors across Australia, the US and here in the UK.”

The group may hope to tap investors for funding to support its growth drive. Mr Duffy has said it will consider acquisitions if good opportunities come up, although the focus will be on organic growth.

Some sector watchers have said National Australia should not have completed the IPO amid the volatility seen in global stock markets recently.

The offering valued CYBG at around £1.6bn, near the bottom of the expected range of around £1.5bn to £2bn.

The group had a £2.7bn book value at 30 September.

Shares in CYBG closed down 4p at 203p yesterday. That left them 11 per cent, 23p, above the 180p price they listed at last week, when trading was limited to institutions.

Sector watchers have noted challenger banks could attract interest from investors at a time when the Government is keen to encourage competition.

In the IPO prospectus it issued last week, CYBG said:

“The (EU) referendum could materially change the regulatory regime that would be applicable to CYBG Group’s operations in the future. This could increase compliance and operating costs for CYBG Group and have a material adverse effect on CYBG Group’s business, financial condition.”

It added: “A referendum decision to exit the EU may also increase the possibility of another referendum on Scottish independence from the UK, creating further uncertainty on Scotland’s position within the UK, which may create additional costs for CYBG Group (including changes to pension arrangements, costs of regulatory compliance and, if deemed necessary, a change of headquarters to England) and adversely affect its business.”

Founded in 1838, Clydesdale Bank was acquired by Midland Bank in 1920.

NAB bought Clydesdale from Midland for £420m in 1987 and paid around £900m for Yorkshire Bank in 1990.