The owner of the Clydesdale and Yorkshire banks has seen a deterioration in bad debts after the UK’s economic recovery faltered at the end of 2010.
National Australia Bank (NAB) said the UK business continued to “demonstrate its resilience” but that the ratio of distressed assets rose to 3.34% at the end of December from 3.15% at the end of the previous quarter.
Demand for credit has also been subdued but NAB said it was on track to deliver its two-year pledge to advance £10 billion of gross new lending to businesses and mortgage customers by October this year.
NAB said the economic outlook remained weak with a slow recovery expected due in part to the impact of the government’s austerity measures.
The figures cover the first quarter of the company’s financial year, when UK economic output contracted by 0.5% due to the weather and low consumer confidence.
Chief executive Lynne Peacock added: “Against a background of economic uncertainty, our UK business continues to demonstrate its resilience and our prudent strategic direction is unchanged.”
The UK business, which has around 400 branches and employs 8,355 staff, delivered profits growth of 53% to £164 million in its most recent financial year after it reported an 18% drop in provisions for bad debts.
NAB, which bought the Clydesdale in 1987, has been the subject of deal speculation over the last year after it was unsuccessful in the auction of 318 branches put up for sale by Royal Bank of Scotland, a deal later secured by Spanish giant Santander.
It has reportedly considered listing its UK business, although a sale is also said to have been an option.
The wider NAB business today reported an 18% rise in first quarter earnings to 1.3 billion Australian dollars (£817 million) and said its business and personal banking divisions had been key drivers of revenues growth in the quarter.
Discover more from London Glossy Post
Subscribe to get the latest posts sent to your email.
