National Australia Bank today confirmed it is to exit UK property lending through its UK subsidiaries, Clydesdale and Yorkshire banks.
Announcing the results of a strategic review of its business, NAB said it had decided to reduce its UK risk appetite based on the prospects for the UK economy.
As part of the move, NAB’s £6.2bn property loan book will be moved onto its balance sheet, with an orderly run-down carried out over the next six years.
This is expected to include the sale of its loan portfolios.
NAB said its UK operations had made a loss of £25m in the second half of the financial year, compared with a £77m profit the same time a year earlier.
It blamed the fall on deteriorating commercial property loans and an increase in the cost of funding after Clydesdale’s credit rating was downgraded last September.
The bank made a charge in its accounts of £282m for bad loans, mainly in the commercial property market.
Over the next three years 1,400 jobs will be lost at its two UK subsidiaries.
bridget.o’connell@estatesgazette.com
