One of Australia’s biggest blue chip stocks, National Australia Bank (NAB), has reportedly withdrawn from its pursuit of Royal Bank of Scotland’s UK branches.
It is believed that NAB’s outlook for the UK economy has deteriorated in the last few weeks, prompting the bank to reconsider its existing exposure to the country.
While NAB has stated that it doesn’t intend to sell the Clydesdale and Yorkshire Banks, there are suggestions that some of Spain’s larger banks could make a play for these divisions.
Separately, NAB’s US division, Great Western Bank, has acquired assets and liabilities of TierOne Bank for approximately US$76 million.
The decision is expected to add to NAB’s earnings and will be funded entirely through existing deposits.
NAB’s recent share price weakness, relative to other financial blue chip stocks, stems from its questionable foray into the UK market and its continuing pursuit of AXA, which the market fears will lead to an additional capital raising.