The clock may be ticking for National Australia Bank over an overdue write-down of goodwill on its wealth management arm, which comprises MLC and other smaller holdings.At a strategy briefing held on Wednesday last week, NAB's chief executive, Cameron Clyne, said: "We're going to have to deal with some of the other regulatory burdens, such as, potentially, a full deduction for our wealth business, which will be, substantially, a significant burden and will question whether or not banks can own wealth companies."This is an industry-wide issue. It is tied to changes in the regulatory treatment of banks' investments of capital in other financial institution-type activities, such as wealth businesses.  Caroline Bennet, of Deloitte Actuaries and Consultants, explained in an email that to align with the Basel III framework "APRA have adjusted the capital treatment of deconsolidated subsidiaries for banks in Australia. "Under the approach adopted by APRA, there will be a 100 per cent deduction from tier one common equity applied for the investments in capital in deconsolidated entities, whereas previously there was a 50/50 deduction approach applied from tier one and tier two.   "As a result, the tier one deductions for these investments have been increased relative to what arose previously for Australian banks. "The additional capital required by the banks is placing pressure on the ability… [of] banks to return equity at sufficient levels for products with the increased deduction for tier one common equity."Group capital requirements for entities to be regulated as conglomerates by APRA will also be impacted by the Level 3 capital framework soon to be released by APRA."Even under the existing capital rules, NAB's wealth business is a problem for the group.In May 2012, in an interview with Sydney Morning Herald, Clyne acknowledged that the bank overpaid for MLC - now the core of the bank's wealth management arm - and that, taking into account the goodwill associated with MLC, it was a drag on return on equity.''We are conscious of it," Clyne said then. "We can't really impair goodwill, but we could look at ways of restructuring the business that changes its structure. It's a fair point and the whole industry is suffering from that.''NAB reported goodwill of A$4.07 billion for MLC and the wealth business in its annual report, in September 2012, out of a $7.09 billion total.This is roughly the same level of goodwill that was recognised in the accounts in 2006 and reflects a transition to new accounting standards that year.Since 2006, and especially in recent years, NAB has made a series of niche acquisitions in wealth management, mainly boutique fund managers. This list includes Antares Capital Partners (formerly Aviva Investors Australia), Invia Custodian, Metrium Financial, Presima in Canada and Calibre Asset Management in Hong Kong.NAB's major wealth investment over this period was in the private client arm of JB Were.NAB did recognise goodwill of A$502 million for this series of acquisitions from 2010 to 2012, though some of this goodwill increase also relates to the third-party mortgage funding business