Bank facing £350m mis-sold loans claim

Hundreds of small businesses are to press ahead with a £350 million legal action against CYBG over claims they were mis-sold loans.

RGL Management, which represents the SMEs, expects to make a claim against Clydesdale and its former parent, National Australia Bank (NAB), in the first half of next year.

RGL alleges small businesses suffered a loss from tailored business loans that were sold to them between 2001 and 2012.

Last month RGL brought in All Square Finance to help bring hundreds more businesses to join the suit and the company said the claim size is growing.

The announcement comes ahead of CYBG, parent company of Clydesdale Bank, publishing its financial results today.

RGL chief James Hayward said he was “extremely confident” about the merits of the case.

CYBG was formed in 2016 after NAB divested its UK operations and the bank recently completed a £1.6 billion takeover of Virgin Money.

A CYBG spokeswoman said it was in “correspondence” with RGL’s solicitors over the issue.

“No claim has been received,”

CYBG said.

“The bank has dedicated substantial effort in recent years working through this historic conduct matter, engaging openly and transparently with customers as part of a wide-ranging remediation programme.

“We have made significant progress in resolving the vast majority of cases.

“The allegations contained within the correspondence are not accepted by the bank and if necessary will be defended in the strongest terms possible.”

Clydesdale was owned by National Australia Bank until its de-merger in 2016.