National Australia Bank set to restructure for UK listing

National Australia Bank, owner of Clydesdale and Yorkshire banks, is in talks with the Financial Services Authority about a wholesale restructuring of its business in preparation for dual listing in the UK.

National Australia Bank, owner of Clydesdale and Yorkshire banks, is in talks with the Financial Services Authority about a wholesale restructuring of its business in preparation for dual listing in the UK.

The move would almost certainly involve a major UK acquisition to give the bank a branch presence in the south of England and critical mass in the UK as a whole.

NAB was one of several banks the Woolwich talked to before agreeing a £5.3bn takeover deal with Barclays. Other UK institutions which may meet its acquisition criteria include Alliance & Leicester and Bradford & Bingley. The bank's market capitalisation of A$39bn (£15bn) would put it ahead of Abbey National, valued at £12.7bn.

Frank Cicutto, chief executive of National Australia Bank, believes it needs to get access to a major capital market such as London to improve the marketability of its shares and achieve a rating comparable with its peers. The bank also feels it will become increasingly boxed in strategically while its centre of gravity remains in Australia.

John Howard, the Australian Prime Minister, has ruled out scrapping the country's hallowed "four pillars policy" which bans consolidation between the country's big four banks. This is in spite of the $5bn takeover of Colonial, the insurance group, by Commonwealth Bank, which knocked NAB into second place in the Australian banking hierarchy.

When NAB bought Clydesdale and Yorkshire banks it was assumed the acquisitions would lead to further UK deals. Discussions with the FSA have been going on for some time and are expected to be concluded before the end of the year.

Mr Cicutto has said openly he believes that NAB's portfolio of overseas businesses cannot remain as it is, and is actively working on plans either to sell those businesses or to expand them to a meaningful size. NAB also owns Northern Bank in Northern Ireland, the National Irish Bank, and several small US banks.