Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter

NAB still plagued by UK operations

National Australia Bank’s group returns continue to be stymied by its UK operations, despite recently offloading 20 per cent of its commercial real estate loans.

While the GPB 625 million sale of largely nonperforming UK commercial real estate, or CRE, loans reduced the lender’s risk weighted assets and released GPB 127 million ($354 million) of capital, NAB’s underperforming UK banking operations remain a challenge, according to Morningstar.

“We expect similar transactions during the next 12 months as the remaining GBP 2.4 billion of nonperforming UK CRE loans run off,” Morningstar analyst David Ellis said.

Advertisement
Advertisement

“The UK businesses have struggled because of weak economic conditions and sharp falls in real-estate values,” Mr Ellis said.

“However, during the past 18 months, economic conditions have started to recover, property values have increased and consumer confidence has bounced.”

The recent stabilisation and recovery in UK commercial property valuations has stemmed the flow of loan impairment costs for the bank.

Notwithstanding the proactive actions of management, the UK businesses still underperform and drag on group returns, Mr Ellis said.

“Improved operating conditions in the UK economy and the financial services sector in particular are increasing disposal options with a trade sale or initial public offering potential exit strategies for NAB’s Clydesdale and Yorkshire banks,” he said.

 

NAB still plagued by UK operations
mortgagebusiness

Latest News

Firstmac managing director Kim Cannon is “disappointed” that Treasury rejected the non-bank’s proposed acquisition of Maleny Credit Un...

Asset finance group Consolidated Operations Group has announced that it will “scale back” its equipment leasing but will continue its as...

Half of Australian businesses have already been hit by the economic fallout from the coronavirus outbreak, with approximately 86 per cent ex...

FROM THE WEB
podcast

LATEST PODCAST: The rush to save small businesses

Do you think Australia will move to quantitative easing this year?

Why we’ll keep delivering for our communities in the face of COVID-19

alex

As Australia tries to keep pace with a rapidly changing business and social landscape in the wake of COVID-19, Momentum Media is leading the way delivering essential content to our communities, writes Alex Whitlock, director of Mortgage Business.

Read more

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.