NAB waits in the wings as British banks are broken up
Sydney Morning Herald
Tuesday November 3, 2009
NATIONAL AUSTRALIA BANK would be permitted to make a move on the 300-plus branches that Royal Bank of Scotland could be forced to sell in a shake-up of the British banking market.However, NAB's chief executive, Cameron Clyne, remains cautious about expanding overseas because of the troubled state of banking markets, particularly in Europe.The British Government and the European Union have jointly agreed to an overhaul of part-nationalised lenders such as RBS and Lloyds Banking Group, including a forced sale of parts of their branch network over the next few years.The RBS branches earmarked for sale are mostly focused on small- to mid-sized business lending, but the Lloyds sale extends to the 185 branches of Lloyds TSB Scotland.Under the rules of the sale, the British Government will ensure any potential buyer will not emerge with a share of more than 15 per cent of any specific market.Through its Clydesdale Bank, NAB has a 3 per cent share of the British deposit and lending market and about 4 per cent of the small to mid-sized business market. Its share of the Scottish banking market is closer to 15 per cent.Spain's Santander €“ which analysts say is best-placed to make a move on RBS assets €“ has up to 8 per cent of the British small business lending market and almost 14 per cent of the retail banking market.In line with the shake-up, the Treasury is expected this week to pour up to 40 billion ($73.1 billion) into RBS, Lloyds and Northern Rock before a planned sell-off.NAB has previously been sounded out by the Treasury about acquiring select parts of the struggling building society Northern Rock, but has been cool towards the prospect.Mr Clyne has made several mid-sized acquisitions in Australia this year, but has been doubtful about the British banking market. "Our appetite for assets offshore has been pretty limited; we haven't seen opportunities for the [British] market because clearly the market has been pretty dysfunctional," Mr Clyne told analysts last week.with Agence France-Presse
© 2009 Sydney Morning Herald
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