National Australia Bank's chief executive, Mr John Stewart, has said he has found no "compelling case" to divest its UK banking assets. The bank owns Northern Bank in Northern Ireland and the Clydesdale and Yorkshire banks, writes Siobhan Creaton, Finance Correspondent.

It also owns National Irish Bank which operates in the Republic, though it is not clear whether his comments also cover the Irish unit.

In an interview with the Australian Financial Review, Mr Stewart gave the bank's strongest indication yet that NAB would maintain the bulk of its operations in the UK. He said NAB had adopted a "default" position in which it would look to repair its UK businesses.

"There is definitely no overwhelming case for us to sell the businesses. The default case is looking at repairing the businesses but because we want to get it absolutely right we are doing all the work to make sure," he said.

Whether NAB decides to sell or retain its UK and Irish banks is the key determinant of short-term returns on the stock as far as investors are concerned. Some analysts have speculated NAB could divest its two Irish banks because they do not offer synergies with NAB's two bigger banks, Clydesdale and Yorkshire.

Mr Stewart initiated a review of the four banks after he joined the bank last year. Soon after he was promoted to chief executive in February, he said the operations could represent a growth platform to differentiate NAB from its domestic rivals as the Australian banking industry battled any slowdown over the next few years.

Speculation about an imminent sale of National Irish Bank has heightened in the wake of the damning report by the High Court Inspectors into the bank's overcharging of customers and for facilitating tax evasion.Mr Steward said NAB was using the UK investment bank Lazard to help in determining the future of the banks.