Question: CYBG has appeared in our Growth Portfolio. Not too sure what strategy to do here. Do we sell (exit the position) or do we carry it as part as a de-facto NAB share for now?

Answer (Paul Rickard): CYBG Plc shares (CYB) were issued in February, following the demerger from the National Australia Bank (NAB). It’s the old Clydesdale and Yorkshire Banks. 75% was distributed on an in-kind basis to NAB shareholders on a 1:4 basis, with 25% sold via an IPO into the market.

I am holding because the shares are very cheap. Essentially, it is a play on a new management team; free from the NAB head office in Melbourne, taking this bank forward.

However, it is such a small investment and probably won’t make any difference to the portfolio return.

Question: My question is in relation to the demerger of CYBG Plc from National Bank. Could you please advise if possible what was the cost base deduction for NAB ? I understand that is something to do with the trading price for the week of the 8th February 2016?

Answer (Paul Rickard): The cost base is $4.01 per share, with a deemed acquisition date of 8 February 2016. If you acquired your NAB shares after 20 September 1985, then you will reduce the cost base for your NAB shares by the CYBG cost base (i.e. effectively $4.01 times the number of CYBG shares you were issued).

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