National Australia Bank is poised to position Clydesdale and Yorkshire banks for sale after the review of its UK arm concludes in May, Australian sources claimed yesterday.
The sources said NAB planned to hive off its troubled commercial property business in the UK to make an eventual sale of the division easier.
One source said: “The question is simple. Does NAB or its investors want the UK assets? The answer is no. The next one is can NAB afford to sell at a fat discount? Probably not.
“That leads to the solution – pretty up the bride for a good match at the right time [referring to positioning Clydesdale and Yorkshire for sale and letting their non-core exposures run off].”
It comes after The Scotsman revealed last week that NBNK Investments, the British banking consolidation vehicle, had contacted NAB again about a possible takeover bid for the UK assets since the group announced the strategic review of the operation in February.
NBNK unsuccessfully tried to put together a takeover deal last autumn with the aim of then adding the 330-plus Clydesdale and Yorkshire branches to the 630 Lloyds TSB branches it was also attempting to buy. The Co-operative Bank has since been named by Lloyds as the preferred bidder for those branches.
A spokesman for NAB UK said yesterday the management was continuing its strategic review “to appropriately reposition our business mix and structure for the changed economic environment and to improve returns”.
“We will inform the market on the outcome of the review by the time of our interim results in May,” he added.
NAB’s investors have become disenchanted with the Clydesdale and Yorkshire operations because their lower earnings are seen as a drag on the better returns their parent earns in Asia.