NAB Denies Rumours Of Exiting The UK

Post by Sharat on June 18, 2010 · Under Australian Economy, Business News, Company News, banking · Comment 

Australian banking major National Australia Bank has denied speculations that intends to exit the UK and sell off its British units, after the lender last week dropped out of the bidding to acquire a 318 branch network from Royal Bank of Scotland.

Mark Joiner NAB’s chief financial officer says the lender remains optimistic over its prospects for acquiring AXA Asia Pacific Holdings, despite the fact that the competition regulator has failed to give its approval.

NAB own two banks in the UK, the Clydesdale and Yorkshire banks, both of whom combined posses between 2 to 3 per cent market share in the recession struck UK. NAB’s UK operations have no immediate prospect of expanding into a size which has significant scale advantage, and has long been considered a dead weight hanging on the groups performance.

NAB’s CFO making the first public comments by a senior manager since the lender withdrew from the RBS auction said that the bank would continue to be present in the UK, and would ride the wave of any recovery.

“With RBS, we decided that given what was on offer, our own situation and our view of the market, we weren’t ready to buy,” he said.

“We actually feel quite good about our franchise there — there has been a lot of investment in the last few years and it has made enormous reputational gains because it’s the only bank in Scotland that didn’t go broke.”

Mr. Joiner added that Clydesdale had managed to grow its deposit base at twice the rate of the banking system in general, and that its profit margin on new business far more attractive since before the financial crisis.

NAB would therefore put Clydesdale on a growth footing, and benefit from a recovery in the currency and industry margins.


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