NAB’s CEO Andrew Thorburn, who took the helm in August, has moved quickly to clear up what the group sees as problem areas.
He has already sold a big chunk of UK non-performing loans and shuffled key management roles as well as offloading a minority stake in the bank’s US unit, Great Western Bancorp via a public offering,
NAB’s UK business, which includes Yorkshire and Clydesdale bank branches, is seen as a thorn in the group’s side, with charges for bad and doubtful debt responsible for annual profit declines.
Omkar Joshi, a Sydney-based investment analyst, said: “I think what’s really positive is that they have reinforced that they want to get out of UK.”
NAB said it is examining a range of options for the UK business, including a public float, as its operations have improved to the point where it could get sufficient value out of a sale.
Annual cash earnings at the UK business nearly doubled to £158m while net interest margin, a core measure of profitability, rose 10 basis points to 2.22 per cent.
Mr Thorburn said: “We have an intention to exit the UK. We think there’s an opportunity now that probably wasn’t there before. What we are signalling is that’s our intent, it is an absolute priority.”
NAB paid £420m for its Clydesdale branches in 1987 and around £900m for the Yorkshire business in 1990.
Mr Thorburn also said the bank needed to urgently deal with its low-returning assets, including its wealth management arm.
NAB’s overall cash earnings for the year to September 30 fell to £2.8m, marking its second profit drop in three years.