Moody’s decision has NAB itching
(1 August 2011 – Australia) National Australia Bank (NAB) will find out in the next week whether Moody’s rating agency will cut the rating of its British banking arm.
The move comes as figures show NAB's Clydesdale Bank fell into a loss for the March half after taking a bigger-than-expected provision linked to the sector-wide misselling of a mortgage insurance scheme.
Accounts lodged with United Kingdom regulators also show NAB injected £200 million (A$299 million) into its Clydesdale Bank business during the March half to help bolster the balance sheet of its biggest offshore banking business.
In May, Moody's placed Clydesdale Bank's A1 rating on review for a possible downgrade.
The move was part of a review of 14 UK banks and building societies - including some of the nations biggest - taking into account which banks are likely to receive taxpayer bailout if they get into financial trouble.
The first stage of the review is expected to be released this week.
''The UK economy remains challenging,'' Clydesdale Bank said in its accounts. ''The outlook for the remainder of the year remains subdued,'' it added.
NAB has cooled its interest in bidding for the 632 Lloyds branches that are up for sale.
As many as 10 potential bidders, including NAB, asked for the details of the sale in mid-June, but Lloyds was left disappointed with the response when only two smaller players submitted offers.
While NAB is believed to still have some interest in acquiring the Lloyds branches, the Australian bank is unlikely to return to the bidding process unless the terms improve, particularly if the issue around the funding gap was resolved.
Accounts lodged with United Kingdom regulators also show NAB injected £200 million (A$299 million) into its Clydesdale Bank business during the March half to help bolster the balance sheet of its biggest offshore banking business.
In May, Moody's placed Clydesdale Bank's A1 rating on review for a possible downgrade.
The move was part of a review of 14 UK banks and building societies - including some of the nations biggest - taking into account which banks are likely to receive taxpayer bailout if they get into financial trouble.
The first stage of the review is expected to be released this week.
''The UK economy remains challenging,'' Clydesdale Bank said in its accounts. ''The outlook for the remainder of the year remains subdued,'' it added.
NAB has cooled its interest in bidding for the 632 Lloyds branches that are up for sale.
As many as 10 potential bidders, including NAB, asked for the details of the sale in mid-June, but Lloyds was left disappointed with the response when only two smaller players submitted offers.
While NAB is believed to still have some interest in acquiring the Lloyds branches, the Australian bank is unlikely to return to the bidding process unless the terms improve, particularly if the issue around the funding gap was resolved.
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