A CITY grandee is in talks with National Australia Bank about buying Yorkshire and Clydesdale banks.
NAB is carrying out a strategic review of its UK assets, which face a deteriorating economic climate and an increase in bad debts.
Lord Levene’s buy-out vehicle NBNK is understood to have had initial consultations with the Australian bank.
A spokesman for NAB would not comment on speculation.
He said: “NAB has commenced a strategic review, and will work with UK management to appropriately re-position its business mix and structure for the changed economic environment and improve returns.
“We will inform the market of the outcomes of the review, which we expect to occur by the time of our interim result in May 2012.”
A spokesman for NBNK added: “No comment from me frankly.”
NBNK was formed in 2010 as a vehicle to acquire UK retail banking assets.
It tried and failed to win a battle for some 630 retail branches which were being sold by Lloyds Banking Group.
“NBNK will now consult with its investors and further announcements will be made as appropriate,” the company said in December, after losing out to the mutual Co-operative Group.
NBNK has raised £50m on the junior stock market to fund its bidding activities.
Its backers include Baillie Gifford, F&C Asset Management, Invesco Asset Management, JP Morgan Asset Management and UBS.
NBNK plans to tap these investors and others to pay for acquisitions.
Lord Levene was chairman of insurance giant Lloyd’s of London for nine years until 2011. He is a former vice chairman of Deutsche Bank in the UK.
Yorkshire and Clydesdale have 337 branches and 8,300 employees, including 2,000 working in Yorkshire.