Yorkshire Bank owner moves closer to UK exit with sale of £1.2bn loans
THE Australian owner of Yorkshire Bank has taken a large stride towards exiting the British market after selling a further £1.2bn of higher risk loans from its UK commercial real estate (CRE) portfolio.
National Australia Bank (NAB) sold the loans to an affiliate of US private equity group Cerberus Global Investors in a deal which reduced the level of higher risk loans in NAB’s UK CRE portfolio by 93%.
The loans being sold are mainly defaulted, watch and high loan-to-value loans, and means the balance of the portfolio is just £836m – down from £5.6bn in October 2012.
Cerberus has previously bought a chunk of the UK CRE portfolio from NAB, reportedly spending £485m to acquire loans of £625m in July. No sale price has been given for the latest tranche.
NAB group chief executive Andrew Thorburn said the bank had accelerated the run-off of its UK CRE portfolio, with the great majority of the remaining non-performing loans being sold.
“This is an important step forward, effectively bringing closure to one of our legacy positions,” Mr Thorburn said.
“The sale of these higher risk loans in the NAB UK CRE portfolio is another important milestone in our strategy of reducing our low returning legacy assets and sharpening our focus on our core Australian and New Zealand franchises.
“Pleasingly the remaining NAB UK CRE loans are largely strong performing loans, and we will look at other options to manage this small remaining portfolio.”
NAB recently confirmed it was preparing a £2bn-plus floatation of Yorkshire and Clydesdale banks as it looks to withdraw completely from the British market.
