Returns halve at Great Western

National Australia Bank paid $US20 million for the Colorado-based assets of First Community Bank through its subsidiary Great Western Bank, the US bank announced a week ago.

GWB, based in South Dakota, will acquire 20 branches with around US$444 million in loans and US$477 million in deposits across 20 branches. The bank said the purchase excludes around US$210 million of real estate construction loans and other loans.

NAB invested in Great Western in late 2007 in order to craft an agribusiness strategy in the US market. Many of the branches purchased from  First Community are in urban areas of Colorado.

FDIC data shows that GWB had assets of US$4.3 billion at December 2008, a rate of growth of 22 per cent over NAB's first year of ownership.

The bank's return on assets fell to 1.10 per cent over 2008 from 1.23 per cent in 2007 under the prior owners. The return on equity fell to 7.4 per cent in 2008 from 14.5 per cent in 2007.