NAB Says No UK 'Fire Sale' As It Seeks To Save $825 Million Per Year
National Australia Bank, Australia's largest bank by assets, said on Wednesday it would not engage in a "desperate fire sale" of its UK unit, as it announced restructuring plans to save up to A$800 million ($825 million) a year.
NAB, like other "Big Four" Australian banks, has been generating record profits based largely on the domestic lending market but has been hamstrung by its poorly performing UK operations.
"The UK is clearly a problem asset," NAB chief executive Cameron Clyne said at an analyst briefing. "But there have been very, very limited options that we could have undertaken."
Clyne said NAB had decided to take a long-term view of its UK operation, rather than rush to a "desperate fire sale" which shareholders did not support.
"We will continue to manage the UK," he said. "There may be a point that we cut and take some issue with the UK, but I don't think that is practical."
There was speculation in January that Spain's Banco Santander SA was mulling a $3.2 billion bid for NAB's 337 Clydesdale and Yorkshire bank branches. Santander denied it was in talks with NAB.
(Read More: Santander's Mexico Unit Raises $4 Billion in IPO)
NAB said its restructuring strategy -- affecting management, technology and its operating model -- was needed to adapt to the changing needs of its customers and to capitalise on their links to Asia.
The initiatives would save about A$800 million a year by the end of the fifth year, partly offset by higher software charges, reinvestment and implementation costs.
The bank also announced a number of senior executive changes including the retirement of Mark Joiner as executive director of finance.
Job losses were not mentioned either in the statement or the analyst briefing. The Finance Sector Union of Australia said Clyne had repeated to the union that no large scale job cuts were planned this year.
NAB shares dropped 2.3 percent to A$30.81 by 0036GMT, compared with a broader market decline of 0.3 percent.