14 March, 2010

Australia Bank Mergers & Acquisitions (National Australia Bank)

Photo: A National Australia Bank branch in Blayney, New South Wales.

With special thanks to Giles Martin for allowing me to use his photo. You may see more of his photos via this link:


National Australia Bank Group

National Bank of Australasia was founded in 1858 but it failed in the 1893 Banking Crisis when the Australian real estate bubble burst. Later in the same year, the bank re-emerged as National Australia Bank Ltd. Today, the initials NAB are commonly used.

In 1987, National Australia Bank purchased Scotland's Clydesdale Bank (founded in 1838) and Northern Ireland's Northern Bank (founded in 1809) from Britain's Midland Bank. Clydesdale Bank is one of the three banks authorised to issue Pound Sterling banknotes in Scotland, whereas Northern Bank is one of the four authorised to issue Pound Sterling banknotes in Northern Ireland.

In 1990, National Australia purchased England's Yorkshire Bank (founded in 1859) for GBP 976-million, and this was followed by the acquisition of the Bank of New Zealand (founded in 1861) in 1992.

Recent transaction(s):

  • In 2001, National Australia sold Michigan National Bank in the U.S. to ABN AMRO Holding NV for USD $2.75-billion.
  • In 2005, National Australia Bank sold its Irish and Northern Irish banking operations (National Irish Bank and Northern Bank) to Denmark's Danske Bank A/S for GBP 967-million.
  • In 2007, NAB bought Sioux Falls, South Dakota-based Great Western Bancorporation for AUD $ 900-million (USD $798-million). Great Western is privately-owned and had over 100 branches in South Dakota, Iowa, Nebraska, Kansas, Missouri and Arizona. NAB said that the purchase would be an important move for its expansion in the farm financing area.
  • In 2009, NAB bought Aviva plc's Aviva Australia Holdings for AUD $825-million (GBP 403-million), plus up to another AUD $100-million in adjustments after the completion of the deal.
  • In August 2009, NAB bought the mortgage unit of Challenger Financial Services for AUD $385-million (USD $316-million). The unit had AUD $4-billion worth of loans.
  • In December 2009, NAB offered to take over AXA Asia Pacific Holdings Ltd. for AUD $13.3-billion (Eur 8.22-billion, USD $11.83-billion) in cash and NAB shares, on the condition that French insurance giant AXA S.A. agreeing to buy AXA Asia Pacific's operations in Hong Kong, China, Thailand, Malaysia, Singapore, Indonesia, the Philippines and India for AUD $8.69-billion. That would leave NAB with AXA Asia Pacific's Australian and New Zealand operations at a net cost of AUD $4.61-billion. AXA S.A. currently owned 54% of AXA Asia Pacific, with the rest of the shares being publicly-traded. Earlier, AXA S.A. and Australian insurer AMP had agreed to acquire AXA Asia Pacific for AUD $12.85-billion in cash and AMP shares, with AMP keeping the Australian and New Zealand units and selling the rest of the Asian operations to AXA S.A.
  • In April 2010, Australia's competition watchdog unexpectedly blocked NAB's plan to take over AXA Asia Pacific, opening the door for AMP to renew its expired bid. NAB formally terminated its bid for AXA Asia Pacific in September 2010 after failing to appease the competition authority's opposition.
  • Between October 2014 and July 2015, NAB floated its American subsidiary Great Western Bank through three tranches and raised a total of USD $1.1-billion (AUD $1.46-billion). Great Western Bank was based in South Dakota and had 162 branches in South Dakota, Iowa, Nebraska, Colorado, Arizona, Kansas and Missouri. It specialized in business and agriculture lending, but was considered to small and too remote from NAB's home market to be run efficiently.
  • In May 2015, NAB announced that it would spin off its British retail banking operations.  The business consists of Scotland's Clydesdale Bank and England's Yorkshire Bank, which together have a network of 294 branches across Britain.  NAB will pass 80% of the yet-to-be-named listing to its shareholders while selling the remaining 20% to institutional investors.
  • In October 2015, NAB announced that it had agreed to guarantee GBP 1.7-billion (AUD $3.68-billion, USD $2.60-billion) of indemnity against potential future compensation payout related to 'payment protection insurance' (PPI) malpractices by its British operations. The indemnity agreement paved the way for NAB to exit the British retail banking market by way of floating its Clydesdale and Yorkshire Banks. As previously announced, NAB would spin off 75% of the British unit, to be named CYBG, to its existing shareholders, and sell the rest to institutional investors.  CYBG would obtain a listing on the London Stock Exchange to allow the shareholders to trade the shares.
  • Also in October 2015, NAB sold 80% of its life insurance operations to Japan's Nippon Life Insurance Co. for AUD $2.4-billion (JPY 205.7-billion, USD $1.7-billion). 

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