Lloyds Banking Group is progressing with the forced sale of 600 branches, selecting a chief executive, Peter Pester, for the business being sold.Lloyds is also working towards identifying the buyer of the branches in the northern hemisphere autumn, the BBC's business editor, Robert Peston reported yesterday. However, the actual sale of the branches is not required, or expected, before 2013, to meet the requirements of the European Union.The chief news in Peston's story is that the Chancellor of the Exchequer, George Osborne, supports the forced sale of more branches.In April, the interim report of the Independent Commission on Banking concluded that "the Lloyds divestiture would be unlikely to give rise to a strong challenger, at least in its early years."The commission wrote that its "current view is that the planned Lloyds divestiture is insufficient and that it will have a limited effect on competition unless it is substantially enhanced." Peston's article is also of interest because his sources led him to speculate that "it is almost inevitable that National Australia Bank, which owns the Clydesdale and Yorkshire banks in the UK, will emerge as the buyer for all or part" of the 600 or more branches that will be for sale.The reasoning used is that NAB will be able to apply less capital to support the £55 billion to £75 billion in home loans, and £35 billion in deposits, which are being sold along with the branches, and on the grounds that NAB uses "advanced" accreditation to work out capital requirements.While this is true for most of the NAB group in the UK, NAB's Clydesdale Bank subsidiary uses the same "standardised" formula as would apply to the other mooted bidders, including NBNK Investments and Virgin MoneyNAB's position on the sale of the Lloyds branches is usually framed in ambiguous language intended to leave the door open for a bid.A widely held theory, propped up by periodic media reports in the UK and Australia, is that NAB is looking into a bid for the Lloyds as a possible mechanism for a long-term exit from its 25-year old investment in the country's banking system.This speculation suggests NAB may bring in a joint-venture partner to own the expanded banking enterprise in the UK.