NAB Plans to Sell UK Assets

National Australia Bank (ASX:NAB) appears to be letting go of its UK assets as it held talks last night to sell its Clydesdale and Yorkshire banks to investment group NBNK in a deal valued up to $2.3 billion.

NBNK is understood to be keen on the sale because it will mean a banking licence and funding for its bid for the 632 branches Lloyds Banking Group is selling. NAB on the other hand, will get an exit option from an underperforming market.

NBNK suspended share trading last night on the London Alternative Investment Market (AIM) until acquisition documents were published. NBNK said that talks were under way but did not name the other party.

"There can be no certainty that a transaction will be forthcoming," said NBNK. NBNK—which stands for "new bank"—was started by Lloyds of London chairman Peter Levene.

NAB chief executive Cameron Clyne later released a statement: ''There is a lot of debate in the UK market at present about the future shape of the UK banking industry with a common theme being that the UK market would benefit from more traditional banks and more competition,'' said Clyne.

''Our No.1 priority is, and has always been, to grow the business organically but in this climate it is also only natural that we would look at other options available to us.''