Monday, April 30, 2012

NAB to slash 1,400 jobs as it restructures ailing UK business

National Australia Bank has announced a restructure of its loss-making business in the United Kingdom to focus on retail operations and small business lending.

The bank will cut 1,400 jobs from its UK operations - including Clydesdale Bank and Yorkshire Bank - by 2015, and restructure its balance sheet by transferring most of its commercial real estate assets to NAB Group from next financial year.

Here's my analysis broadcast on The World Today.

NAB group chief executive Cameron Clyne says the group cannot find a buyer its for its British banks.

The UK business posted a $39 million loss for the six months to the end of March due to bad debts and higher funding costs.

"It's not as though we've been walking past deals in the last three-and-a-half years, but there has been speculation over the asset - we have received informal and speculative expressions of interest, all of which are at very low valuations," Mr Clyne said.

"So I think as long as UK banks are trading at this sort of valuation ... the option we're taking is a better option."

Mr Clyne says the problems in the UK will not stop it from passing on any interest rate cuts.

"There is no correlation between what we have announced today and anything that we do in our Australian business," he said.

No comments:

Post a Comment

What's your view on this?