Spanish Bank BBVA in talks with NAB to acquire its assets in the UK for £2 billion

Spain’s biggest banker, BBVA, is said to be in talks with National Australia Bank in a bid to acquire the Australian bank’s businesses in Yorkshire and Clydesdale in Britain. This potential investment, expected to value the UK business at £2 billion is being made in the wake of NAB’s withdrawal from an auction that was to buy 318 Royal Bank of Scotland branches last Friday.


According to the times magazine, NAB was expected to auction the banks for possible acquisitions in the coming few weeks but now there exist high expectations that the Australian bank will quit the UK market altogether, preferring a sale over a listing of its UK businesses. However, both banks would not divulge the details of this proposed deal when reached for comment.


The Spanish bank had previously called off a potential acquisition of the Royal Bank of Scotland’s 300+ branches in a 2 billion pound deal that the bank turned down at the last minute. NAB, owner of Clydesdale and Yorkshire banks had initially indicated that it saw itself as a platform for the consolidation of the UK banking industry.


Cameron Clyne, NAB chief executive, still holds that NAB UK, according to him, was more of a consolidator of the banking sector than as a potential takeover bank for any acquisition investment seekers. Even so, reports indicate that Clyne may rethink his position after the failure of NAB’s move on the RBS branches in Scotland. As at now, the Spanish bidder, Santander, is the only remaining player in the auction.


In this acquisition investment deal, NAB UK is expected to get up to £2 billion in a sale, according to banking industry pundits in the UK. As per their prediction, analysts said that BBVA would not be a contentious bidder for Clydesdale and Yorkshire banks because its absence in the UK means that the bank would not trash NAB UK’s back office offer if it did acquire its assets.


In that sense, that would make the acquisition more politically pleasant, said one industry analyst. It is understood that the two banks, BBVA and NAB, mulled over bidding jointly in the RBS auction. Joint venture in the UK is thought to be an option and so is partial stock market listing for NAB’s UK arm. Nevertheless, the chances that BBVA might succeed in its takeover bid is becoming real by the day, as investment banks such as Morgan Stanley and Goldman Sachs advise NAB on its options for its UK arm.


June 8, 2010.