Aussie bank targets A&L

AUSTRALIA'S second-ranked bank, National Australia Bank, is looking at a possible deal with Alliance & Leicester as it reviews its British and Irish operations.

NAB's new executive general manager for the UK and Ireland, Steve Targett, has nominated the former building society as a possible partner for NAB, which already owns four regional banks in Britain and Ireland, including Clydesdale and Yorkshire banks.

'We have looked at a number of things and clearly Alliance & Leicester is one of the organisations of the size that would appeal to us,' said Targett.

NAB flirted with the idea of making a play for Abbey National last year, then transferred its attention to A&L before being diverted by the A$3.62m (£1.3m) write-down of its US mortgage business, HomeSide Lending.

Analysts have suggested NAB may also consider selling its two assets in Northern Ireland and the Republic - Northern Bank and National Irish Bank - as a way of funding its expansion in Britain. The pair would fetch about £1bn against A&L's market capitalisation of around £4.2bn. NAB itself is valued at £19.5bn.