SYDNEY: National Australia Bank said Thursday it was considering a float of its troubled British business after it was hit with a fall of nearly 10 percent in cash profits due to hefty UK writedowns.
Annual net profit was down 1.1 percent at Aus$5.3 billion (US$4.7 billion), but cash earnings, which strip out volatile items and are more closely watched by analysts, dropped 9.8 percent to Aus$5.18 billion in the year to September.
NAB chief executive Andrew Thorburn described the result as "disappointing."
"While our Australia and New Zealand franchises are in good shape, it is disappointing to record a full-year result that includes a Aus$1.5 billion after tax in UK conduct provisions and other impairments," he said.
NAB has been restructuring its British businesses, particularly the Clydesdale and Yorkshire banks, and at the start of the month flagged more than US$1 billion of writedowns, including a Aus$297 million charge for the introduction of new software.
"Our clear focus is on our Australian and New Zealand franchises... and as a result we need greater urgency dealing to our remaining low-returning assets," Thorburn said.
"In relation to exiting UK banking, this means we are now examining a broader range of options including those provided by public markets."
NAB bought Scotland-based Clydesdale Bank in 1987 and Yorkshire Bank in 1990.
The Australian lender did not provide further details on when and how it would exit the British arms, but said it had spoken to regulators about such a move.
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