Disappointment all round in Britain
NAB management continues to take a doggedly vague stance when invited to confirm the strategic options for its business in Britain.Pressed a couple of times at yesterday's investor briefing the bank's CEO, Cameron Clyne would only say "we've made no call on what we're doing in the UK".NAB is widely believed to be one of the bidders for the 300 plus branches and customers' lists being sold by Royal Bank of Scotland, and theories circulate over whether or not the bank may seek to rope in an outside investor for such a bid, for the whole of its UK banking franchise, or whether the bank might as well take advantage of the interest of other bidders and put Clydesdale Bank on the market.Clydesdale continues to be a drag on earnings in a manner that Bank of New Zealand, also operating in a recessed economy, is not.NAB's business in Britain reported cash earnings in the March 2010 half of £61 million, up from £28 million six months earlier.The return on assets (reported by NAB as cash earnings on average assets) was 0.28 per cent in the latest half, double the level of the second half of 2009 and a little better than the first half of 2009.Underlying profit even fell over the last half to £264 million.The plan for a recovery in earnings - which need to improve by a factor of four, measured on ROA - appears to be to ride the recovery in the British economy (such as it is)."We'll get everything from the upturn there," was Clyne's phrase.