National Australia Bank, the nation's top lender, said on Friday it was in talks to buy ABN AMRO's operations in Australia and New Zealand which was being sold following ABN's acquisition by a banking consortium including Royal Bank of Scotland.
"There can be no certainty that a transaction will result. Any potential transaction would be subject to due diligence and, ultimately, the receipt of relevant regulatory approvals," NAB said in a statement.
NAB also said it would issue about 34.85 million shares at A$27.26 per share through a dividend reinvestment plan.
It added that it may be required to make provide additional provisions for its $1.1 billion worth of collateral debt obligations (CDO) exposure as the economic environment has deteriorated.
NAB has currently made A$181 million collective provision for its CDO exposures so far.
ABN AMRO's Australia and NZ units comprise wholesale corporate and investment banking operations and two retail distribution joint ventures, ABN AMRO Morgans in Australia and ABN AMRO Craigs in New Zealand.
ABN AMRO Holdings earned a net profit of A$131.4 million in fiscal 2007, The Australian Financial Review said in a report last week. The report also mentioned Commonwealth Bank of Australia and Japan's Nomura Holdings as two other bidders for ABN AMRO Holdings.
RBS along with Spain's Santander and Belgian-Dutch Fortis bought ABN AMRO for about $99.4 billion last year.