NAB targets South-East for growth

NATIONAL Australia Bank is planning a new assault on the South-East in a bid to gain market share for its UK banking and financial services businesses.

Repeatedly frustrated in its attempts to secure a merger with a big British bank, NAB has said it can no longer wait for such a marriage. But the one-time suitor for Abbey still considers the UK a key growth market and has vowed to grow organically.

In common with fellow Australian AMP, the bank has taken a hammering in its UK pensions business, with soaring costs wiping 5% off its UK profits in the past year.

Pension costs increased by £26m to £44m during the year, and NAB warned they would balloon to around £87 million in 2004. European profits fell to £460m from £486m.

Undeterred, NAB, which owns the Yorkshire, Clydesdale, Northern and National Irish banks, plans to unite its operations into a franchise spanning Britain and Ireland.

Announcing a record Australian net profit of A$2.09bn (£890m), NAB chief executive Frank Cicutto said the bank was focused on transforming the UK operation 'to become a more nimble and aggressive competitor in the south of England'.

John Stewart, the new boss of NAB's European business, is overseeing NAB's financial services strategy in the UK and the integration of existing back office operations.

The bank recently opened four new financial service centres at Liverpool, Bristol, Reading & Southampton and is embarking on a rapid expansion in the south. Another eight High Street sites are planned, including Oxford, Milton Keynes, Kent and Hertford.