NAB could sell off Irish banks by November

NATIONAL Australia Bank (NAB) could complete the sale of the Northern Bank and National Irish Bank (NIB) for up to €1.7 billion by November 10 next, it emerged yesterday.

British bank HBOS are odds-on favourites to buy the banks in a move that would give it access to an Irish clearing bank and provide more competition in the Irish market.

Yesterday, NAB chief executive John Stewart said several expressions of interest in their Northern Bank and NIB have been received.

"No decision has been made to sell them. However, given these expressions of interest, we believe it is in shareholders' interests to explore this option.

"As such, we have commissioned Lazard's to issue an information memorandum and test the market. If we do not receive an offer that reflects the true value and potential of the Irish businesses, we will continue to invest in them and to grow them organically," Mr Stewart said.

Davy Stockbrokers financial analyst Scot Rank described this as classic "corporate speak" and offered this translation:

"We really want to sell these banks but we don't want to seem desperate."

Goodbody Stockbroker's banking analyst Eamonn Hughes said the announcement came as no surprise and estimate a combined valuation of around €1.4bn-€1.5bn for both Irish franchises, but noted that market valuations have been as high as €1.6bn-€1.7bn.

"We expect to have a decision quite soon, with NAB expected to update investors on its European strategy on November 10 next. It appears natural that any deal would be completed by then," he speculated.

Meanwhile, IBOA general secretary Larry Broderick is determined to ensure that "the jobs, terms and conditions of employment of staff are given priority in any discussions on the future of National Irish and Northern Bank. IBOA has arranged meetings with Mr Don Price, Chief Executive of the Irish Operations and Mr Ross Pinney, Chief Executive NAG, Europe to ensure that staff concerns are prioritised.

"We have also contacted senior politicians and decision makers seeking support to ensure people's livelihoods and employment is protected into the future," he said.

"IBOA has intensified its campaign on behalf of staff to ensure that staff concerns are addressed by any potential purchaser and engaged Legal Advisors to review all agendas of how these developments will impact on staff.

"IBOA is also undertaking a comparative analysis of the different terms and conditions of employment in various potential purchasers with that currently held by staff," Mr Broderick added.