Australia's NAB Opts For UK Bank Revamp Over Sale
National Australia Bank illustrated the tough market facing sellers of UK banking assets on Monday, scrapping plans for a sale of its British banking operations and saying it would instead shrink them by cutting 1,400 jobs, Reuters reported. The Australian bank, which operates 337 Clydesdale and Yorkshire bank branches, looked at a number of options including a sale or expansion but decided neither was realistic given the UK's return to recession last week. "While there's been much speculation about the prospects for an outright sale of Clydesdale Bank the reality is that, given the current pricing of listed UK banks and the difficulty in executing a clean sale, it is unlikely to be a realistic option which could provide value for NAB shareholders," Chief Executive Cameron Clyne told analysts on a conference call. "Growth through acquisition in the UK is not an attractive option and one I am prepared to rule out," he added. Cavendish Asset Management fund manager Paul Mumford said regulatory hurdles and the complex mechanics of deals involving banks were proving a tough barrier to takeover activity. "You have to jump through a number of pretty strong hoops in order to satisfy the regulators that you've got a proper group structure in place after the deal. That may have put off some of the potential purchasers," Mumford said. Those difficulties have been experienced by other UK banks. Read more.