NAB chief denies talk of Clydesdale being up for sale

Published on Monday 9 August 2010 23:09

NATIONAL Australia Bank's boss yesterday brushed off speculation that the Clydesdale might be for sale, as City analysts said it was just as likely that NAB UK remained in the acquisition chase.

Unveiling a group-wide trading update in Sydney, NAB chief executive Cameron Clyne stressed he was happy with the status quo in the UK and that any acquisitions it made here would have to meet the group's financial criteria.

It is an open secret that NAB UK, which also includes Yorkshire Bank, was one of the bidders for the 300-plus bank branches being sold off by Royal Bank of Scotland, which went to Spanish rival Santander for 1.65 billion last week.

NAB UK would not comment yesterday on any industry consolidation strategy, but it is thought to be interested in the eventual privatisation by the government of Northern Rock, and the hundreds of Lloyds TSB Scotland and Cheltenham & Gloucester branches that Lloyds has to sell off.

The European Union has insisted on the sale, as it did the RBS branch sell-off, as part of the price for the taxpayer support both banks have received. The bailouts left the state with an 83 per cent stake in RBS and a 41 per cent interest in Lloyds.

One banking source said yesterday: "Clyne is clearly keeping all options open as far as his UK arm is concerned. The plan looks to be a mixture of organic growth, with the hope that disaffected customers will leave partly state-owned banks, and inorganic growth, if it is possible at a decent price."

It was rumoured recently that Santander might also consider a bid for Clydesdale and Yorkshire banks. But one analyst said: "It looks unlikely. Santander has enough to digest with the RBS branches it has just bought.

"And it might also face regulatory problems having already taken over Abbey National, Bradford & Bingley's deposit business and Alliance & Leicester in Britain."

In a separate update yesterday for the third quarter to June, NAB UK said the economy showed signs of recovery but that it remained cautious.

"The economy is still absorbing the effects of the June emergency Budget which set out the new government's programme for deficit reduction. Financial concerns about European banks are an additional reason for caution," NAB UK said.

Lynne Peacock, chief executive of Clydesdale and Yorkshire banks, added: "We continue to follow a steady and prudent course. While the signs of economic recovery remain encouraging, our strategic direction is unchanged."

Without giving figures, NAB UK said bad debts fell in the quarter to June compared with the same quarter last year.

Clyne said the parent group delivered "solid, sustainable results" in the period. He said the results were "consistent with the strategy announced last year, particularly the focus on developing our Australian businesses", he said.• Rory Tapner has been appointed head of Royal Bank of Scotland's wealth division, the private banking arm that including Coutts.