NATIONAL Australia Bank (NAB) is likely to position its UK bank assets for sale after separating off its troubled commercial real-estate business at the end of an ongoing review of its UK operations, two sources said.
The result of the review is due in May, and it is still classified within NAB as an operational review with a focus on raising the returns from the business that is a drag on NAB’s earnings, they said.
NAB’s UK bank business spans 335 branches through its Yorkshire and Clydesdale branches. It also holds about £6bn ($9.4bn) in commercial real estate exposure, with close to a tenth of that stressed, the sources said.
Analysts estimate NAB UK assets to have a book value of around £3.0-3.5bn ($4.7-$5.5bn) and a sale could raise anywhere between 0.5 to 0.7 times book in current market conditions, or between $2.3bn and $3.9bn.
The sources said the core portfolio had the likelihood of fetching closer to book value, if not more in the short term, once the real-estate exposure was hived off.