NAB Expected To Bid For RBS Branch Network

Post by NeilMc on April 6, 2010 · Under Business News, Company News, International Business News, Mergers & Acquistions, banking · Comment 

Australian banking major National Australia Bank (NAB) is widely tipped to be one of the three bidders in the first round of troubled UK lender Royal Bank of Scotland’s auction of a 318 strong branch network.

According to British newspaper reports, NAB is likely to face intense competition from Spanish banking giant Banco Santander and Richard Branson’s Virgin Money.

RBS required a massive bailout from the British government during the financial crisis, resulting in the British government acquiring an 84 per cent stake in the lender.

As a condition of the bailout, European regulators are forcing the lender to sale a variety of assets including the branch network.

The three bidders have been conducting due diligence on the assets for the last few weeks, and it is being speculated that NAB will table a bid for the network in partnership with a private equity fund.

NAB chief executive Cameron Clyne has  yet to commit to a concrete UK strategy, but has undertaken a review of the lenders British businesses, which include the Clydesdale and Yorkshire banks.

Mr. Clyne has kept all his options open, saying NAB may either choose to sell the businesses or grow them organically.

Mr. Clyne faces a tough choice in the face of the deepest British recession since World War II, and many analysts and investors sceptical of any plan by NAB to expand in Britain and the US.

CLSA analyst Brian Johnson has said NAB, which has bid $4.6 billion for the domestic and New Zealand operations of Axa Asia Pacific Holdings, has a history of paying too much for acquisitions and failing to properly integrate the businesses.

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