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NAB 'seeking advice' on UK loan book

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AAP

2013-02-15

National Australia Bank is believed to have approached advisers to assess its troubled STG5.3 billion ($A7.98 billion) UK property loan book, paving the way for a potential sale.

A report in London's Financial Times on Friday said NAB had asked a group of investment banks and property advisory during the past few days to investigate its options for the loan book.

NAB, which owns the loss-making Yorkshire and Clydesdale Banks, would not confirm or deny whether it had asked for consultants to investigate its options for the loan book.

"NAB has a number of consultancies working across various parts of our business at various times," a NAB spokeswoman said.

Early last year NAB announced that it would cease all its lending operations in the UK property market and move the loans onto its own balance sheet.

Morningstar banking analyst David Ellis said it would make more sense for NAB to hold onto the loan book until the UK economy recovers.

"They've suffered enough financial pain over the last couple of years," he said.

"I think it would be to the shareholders' benefit if they hang on a bit longer and try and work it through.

"I think they should just hang on and wait until economic conditions and property values stabilise and hopefully improve before they attempt to dispose of the portfolio and/or the UK banks."

In January Spanish giant Santander denied it was considering a STG2 billion ($A3.04 billion) offer for the Clydesdale and Yorkshire banks, which mainly serve Scotland and northern England.

NAB's shares closed 16 cents higher at $29.51.