National Australia Bank may sell two Irish banks in separate deals

National Australia Bank (NAB) has hinted that it may sell its two Irish banks individually rather than as a package. Una McCaffrey reports.

The prospect of separate sales emerged after NAB's chairman, Mr Graham Kraehe, said the bank was "considering all the possibilities" on the future of National Irish bank (NIB) and Northern Bank.

"We have had a number of expressions of interest and these covered the spectrum: some people wanted the package, some wanted individual banks, and we are considering all these opportunities," Mr Kraehe said.

His comments, made after a business lunch in Sydney, re-open the possibility that potential buyers could choose to acquire one bank and not the other.

This option would widen the net of interested parties to include institutions such as Irish Life and Permanent (IL&P), which yesterday confirmed its interest in buying NIB.

A spokesman for IL&P said it would be interested in exploring options on NIB if its owner's approach to the sale changed.

The spokesman confirmed that IL&P had not received an information memorandum on NIB and Northern Bank when this was first circulated by London investment bank Lazard in October.

A spokeswoman for Bank of Ireland, which had earlier been cited as a possible buyer for Northern Bank, declined to comment.

NAB did not comment on the matter yesterday but the bank is known to prefer the option of selling NIB and Northern Bank as a package.

The two banks share senior management and their information technology systems are based on one platform.

Separating the two would be a "sub-optimal solution", one market-watcher said yesterday.

Halifax Bank of Scotland (HBOS) was seen as the front-runner to acquire the two banks until last month, when it shied away from making a formal bid.

However, some in the market believe that HBOS may not have been the only serious interested party. One source suggested last night that discussions with another potential buyer may be moving towards a due-diligence stage but this could not be confirmed.