National Australia Bank is receiving advice from Morgan Stanley over its acquisition - and sale - options in the UK,
Sky News reports.
Morgan Stanley's continuing association with NAB cost the investment bank its role as adviser to UK Financial Investments Limited on the future of Northern Rock.
UKFI is the holding company for the British government's stake in nationalised banks.
NAB management has continued to equivocate on its strategic options in Britain, where Clydesdale Bank earns low returns and is an obvious sale option, albeit at a low price. The UK market has numerous bank assets for sale by the government. Others are being divested (in the case of RBS and Lloyds) in line European Union regulation.
On the other hand, after many years of under-investment, NAB may be better placed to buy some of the assets for sale (such as Northern Rock) at relatively low prices and with the prospect of interim financial aid from the UK Government.