National Australia Bank (NAB) said yesterday that it planned to hold onto its European operations, which include National Irish Bank, although it could be up to three years before they are back on track.
NAB chief executive Mr John Stewart indicated that the British and Irish operations, which also include Clydesdale Bank in Scotland, Yorkshire Bank in England and Northern Bank in Northern Ireland, were not for sale at the moment.
"If you look at my track record, if I think I can create more shareholder value by selling something rather than developing it, I will sell it," he said.
"Right now, I don't think it's the right thing. We should repair these banks. We can create more value."
NAB, which is struggling to recover from a damaging rogue trading scandal, reported a 9 per cent drop in first-half operating profits. The European division, which usually accounts for around a quarter of group profits, announced a 34 per cent drop in operating profit to £192 million sterling (€286 million).
The group did not break out separate figures for National Irish Bank (NIB), but said the Irish bank had reported "encouraging growth" in home loans and business lending in particular.
"We are continuing to see strong volume growth and good asset quality in National Irish Bank although margins remain under pressure," NIB chief executive Mr Don Price said.
The bank is planning to expand its services to small and medium-sized firms with the addition of 18 new staff in Dublin, Galway and Waterford from September.
Meanwhile, NAB is continuing its efforts to rebuild and grow its European business, particularly in Britain where it is opening a number of integrated financial solutions centres - or one-stop shops - aimed at retail customers.- (Additional reporting by Reuters)
