Bidders on NIB maintain silence

POTENTIAL bidders in the race to buy National Irish Bank (NIB) remained tight-lipped yesterday as the deadline passed for submitting outline offers for the troubled bank and its sister operation in Northern Ireland.

Front runners Halifax Bank of Scotland (HBOS), Lloyds TSB and Rabobank declined to comment on their plans for NIB and Northern Bank, which their parent, National Australia Bank (NAB), hopes to sell for more than 1 billion. British investment bank Lazard is advising NAB on the sale.

Banking sources place British giant HBOS at the front of the queue as the bank seeks to build on its existing successful presence in Ireland. HBOS already operates here through Bank of Scotland (Ireland), a specialist business and private banking outfit that incorporates the former activities of Equity and ICC banks.

Bank of Scotland also takes the credit for shaking up the residential mortgage market here in 1999, when it launched a call centre based direct sales business that aggressively cut prices and forced other lenders to drop lending rates by up to 1.5%.

Dutch banking heavyweight Rabobank is also active in Ireland, having added to its IFSC-based treasury and leasing businesses with the acquisition of ACC Bank in 2002. Britain’s Lloyds TSB completes the leading pack but NIB and Northern would be its first venture into Ireland.

NAB triggered the sale process after it completed an internal restructuring in the wake of a €220 million foreign exchange rogue trading scandal earlier this year. The restructuring claimed the scalp of the bank’s chief executive and resulted in a boardroom clear-out.

NAB is believed to favour the combined sale of both NIB and Northern, a decision that has made it less likely for Irish-based banks to get involved in the race.

NAB is expected to provide an update on the sales process when it releases annual results next week.