CBA pulls out of race for Lloyds TSB unit

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Commonwealth Bank of Australia (CBA) yesterday ruled itself out of the £2.5bn race to acquire the Lloyds TSB subsidiary National Bank of New Zealand (NBNZ).

CBA said it wished to clarify its position given recent speculation, which saw it being tipped as a possible bidder for NBNZ.

Two of CBA's main rivals, Australia and New Zealand Banking Group and Westpac Banking Corp have already entered the official bidding process. The two Australian banks have made submissions to New Zealand regulators outlining their interest in that country's number one lender.

NBNZ has been up for sale since June when Lloyds TSB said it was considering a disposal. Final bids are due in by the middle of next month. One possible bidder, National Australia Bank, has yet to disclose its intentions.

Lloyds TSB has decided to make the sale because it considers the New Zealand operation to be a non-core asset. It also wants to raise capital in order to maintain its dividend payout at current levels.

A sale would be the first important move by Eric Daniels, who succeeded Peter Ellwood as Lloyds TSB's chief executive in June.