(Australia) National Australia Bank has seen its share price slide after announcing it expected its earnings per share to grow at the bottom of an eight to 11 percent range for FY 03.NAB’s share price fell 48 cents in the two days following the earnings forecast as brokers warned the bank could disappoint investors when it reports its full year earnings.
The bank said the strong Australian dollar and higher pension costs in the UK would affect EPS growth.
NAB chief executive Frank Cicutto said the bank’s retail operations in Australia and New Zealand were performing strongly but that transforming its UK and Irish business would “take time”.
He said wealth management in the insurance and investment businesses had made good progress and the bank would continue to invest in these areas in Australia and the UK.
In fact, speculation is rife that NAB is shaping up to make a bid for UK’s second largest mortgage bank Abbey.
The rumours saw Abbey’s share price soar 4.8 percent with some 22 million shares being traded – a marked contrast to other FTSE 100 banking stocks which have been performing weakly.
Abbey saw off a takeover attempt from Lloyds TSB two years ago but is considered to be even more attractive to buyers after shedding its corporate banking arm, preferring instead to concentrate on personal banking.
UK analysts said Royal Bank of Scotland, Barclays and possibly Lloyds TSB once more could be interested in Abbeys. However, NAB has made no secret of its desire to boost its UK operations.