Yorkshire and Clydesdale owner considers £5.3bn loan book

Yorkshire and Clydesdale owner considers £5.3bn loan book



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The National Australia Bank (NAB) has approached advisers to determine the fate of its troubled £5.3 billion property loan book, paving the way for the eventual sale of the institution's portfolio.

The National Australia Bank (NAB) has approached advisers to determine the fate of its troubled £5.3 billion property loan book, paving the way for the eventual sale of the institution’s portfolio.

The Bank, which is Australia’s four-largest bank by market value, has invited a handful of investment banks and property advisory groups to assess the options for the loan book, according to industry commentators.

NAB had previously announced a total cessation of its lending operations in the UK property market in April 2012, as reported in B&C, and intimated plans to move £5.6 billion of loans to its balance sheet.

Though the bank had claimed that it would avoid such a move and hold onto the loans until they matured, it is widely believed that such news will be welcomed by shareholders, who have previously requested for NAB’s Chief Executive, Cameron Clyne, to pull out of the UK market and focus solely on its domestic business interests.

Mr Clyne has been reluctant to sell, however, arguing that NAB would not get an acceptable price for the business because of the UK’s economic downturn.

NAB said its focus remained on holding the loans to maturity. It added that it would “continue to consult with a variety of advisers on various aspects concerning the portfolio, for example market conditions”.

NAB’s decision to review the options for its UK loan book follows the move last month by Irish Bank Resolution Corporation, the company formerly called Anglo Irish Bank, to hire advisers to help with the wind-down of its €18 billionn of property loans.

In an attempt to stem the growing tide of bad debts from the lossmaking UK business, NAB said in April that it would end commercial property lending in the UK and focus on retail banking and small business lending in Scotland and northern England.

As part of that plan, the bank also said that it would transfer £5.6 billionn of UK commercial property loans on to its balance sheet.

NAB said the restructuring would improve Clydesdale’s balance sheet structure and reduce its reliance on wholesale funding.

Last week, NAB revealed that its UK loan book had been run down by a further £300m to £5.3bn, while bad and doubtful debts in its ‘run-off’ portfolio had fallen in the three months to the end of December.

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