NAB gears up for Northern Rock takeover

The National Australia Bank is gearing up for a takeover of nationalised British lender Northern Rock and has held a "beauty parade" of potential advisers on the deal, according to The Observer.

NAB, which already owns Clydesdale and Yorkshire banks in the UK, has hosted presentations by Lazard, Citigroup, Credit Suisse and Morgan Stanley as it prepares for opportunities that will follow a radical shake-up of the British banking sector this year, the newspaper said.

NAB could also bid for hundreds of branches being sold by Royal Bank of Scotland and Lloyds as part of a penalty imposed by the European Commission for approving state bailouts of the banks, the paper added.

In December, NAB said it had received approaches over its own Clydesdale and Yorkshire banking units.

Northern Rock, Britain's first major casualty of the credit crunch, was nationalised in February last year after rising wholesale borrowing costs left it reliant on emergency government loans for its funding.

The bank was then split into two as part of a plan to restore its savings and lending operations to financial health, paving the way for their eventual return to private ownership.