NAB plans Northern Rock takeover

Reuters

NEW OWNER?: Northern Rock, Britain's first big casualty of the credit crunch, may be taken over by BNZ's owner, National Australia Bank.

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BNZ owner National Australia Bank is gearing up for a takeover of nationalised British lender Northern Rock, British weekly The Observer reports.

NAB already owns Clydesdale and Yorkshire banks in Britain.

It had hosted presentations by Lazard, Citigroup, Credit Suisse and Morgan Stanley as it prepares for opportunities that will follow a radical shake-up of the British banking sector this year, the newspaper said.

NAB could also bid for hundreds of branches being sold by Royal Bank of Scotland and Lloyds as part of a penalty imposed by the European Commission for approving state bailouts of the banks, the paper added.

In December, NAB said it had received approaches over its own Clydesdale and Yorkshire banking units.

NAB was not immediately available for comment. However, Australia's ABC reported yesterday that NAB was in a race for Northern Rock with Britain's Virgin Money and Spain's BBVA.

Northern Rock, Britain's first big casualty of the credit crunch, was nationalised last February, after rising wholesale borrowing costs left it relying on emergency government loans for its funding.

The bank was then split into two in a plan to restore its savings and lending businesses to financial health, paving the way for their eventual return to private ownership.

The Sunday Telegraph reported that Virgin Money had hired advisers to help it acquire a British bank as early as this month. It said Virgin was expected to spend about 50 million (NZ$110.5m).

- Reuters