MELBOURNE, Australia-- National Australia Bank Ltd. retreated
further from the U.K. market with a deal to sell GBP1.2 billion
($1.9 billion) in higher-risk commercial-real-estate loans to a
U.S. private-equity firm.
The sale of the loans to Cerberus Global Investors follows a
similar agreement in late July to sell a GBP625 million bundle of
largely nonperforming U.K. commercial-real-estate debt to the same
firm.
The latest deal reduces NAB's troubled commercial-real-estate
portfolio in the U.K. to GBP836 million from GBP5.6 billion when
the Australian bank started backing away from the loans in October
2012.
The sale of the loans also means the bank is able to stop
recognizing those assets on its balance sheet. NAB estimates it
will lead to about GBP127 million in capital being released at a
time when Australian banks face calls to lift capital buffers
against future potential financial crises.
Andrew Thorburn, who took over as NAB's chief executive at the
beginning of August, has hastened the bank's exit from overseas
markets and made plain an intention to leave the U.K., where NAB
owns Glasgow-based Clydesdale Bank and Yorkshire Bank. The lender
recently floated a stake in its sole U.S. business, Great Western
Bancorp Inc., and plans eventually to sell the business
outright.
The latest parcel of assets being sold to Cerberus were mainly
defaulted and high loan-to-value loans, where the value of the loan
is high compared with the value of the asset the loan is taken
against, making it riskier. Mr. Thorburn said the remaining loans
in the portfolio were mainly strongly performing ones.
Write to Robb M. Stewart at robb.stewart@wsj.com
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