Ailing NAB in Irish bank talks

BELEAGUERED National Australia Bank says that it is still in talks with several parties to offload its Irish banks after negotiations with HBOS fell through.

'We have had a number of expressions of interest and these covered the spectrum. Some people wanted the package, some have wanted individual banks, and we are considering all these opportunities,' chairman Graham Kraehe said.

Irish Life & Permanent repeated this week that it was interested in the Dublin operation only, but National had previously made it clear it wanted the Irish banks sold as a package. HBOS broke off talks with NAB because it said the asking price for the banks was too high.

It is understood National is asking about €1.6bn (£1.09bn) for the 90-branch Northern Bank and around €400m for the National Irish Bank.

In addition to the Belfast-based Northern Bank and the Dublin-based National Irish Bank, the National owns the Clydesdale and Yorkshire banks in Britain.

The future of these banks is unclear, with a review under way at NAB considering several options - the most radical of which would see Yorkshire Bank close and merge with Clydesdale with big job losses. Under that plan NAB would relinquish Yorkshire's licence to cut costs and retreat to Glasgow.

NAB derives about 25% of net earnings from the four UK and Irish banks, but their disparate technology systems have hampered growth prospects.

The sale comes after a disastrous year for NAB beginning with a A$360m forex loss by rogue traders and, more recently, a 20% slump in net profit.

NAB has failed in previous bids to get a toehold in the lucrative markets of the South-East, as have attempts to find a merger partner.