BRANCH BANKING | Tony Chua, Australia

National Australia Bank injects $582mln to British unit

British regulators  stepping up pressure to increase capital to protect lenders from crisis.

Britain's ailing financial services sector has forced National Australia Bank to inject another 387 million ($581.78  million) to support its Clydesdale Bank subsidiary.

NAB agreed to the fresh capital support for Clydesdale at a general meeting of the subsidiary held in London on July 1.

It is another sign that British regulators are increasing pressure on licensed banks to boost capital amid renewed concern over the stability of Europe's financial system.

Under global banking rules, banks and other deposit-taking institutions must hold cash and other liquid assets to shield their businesses and depositors against loan defaults and other financial risks.

Regulators such as Britain's Financial Services Authority typically urge banks to hold more capital (known as Tier 1 capital) on their balance sheets during periods of financial instability.

View the full story in The Herald Sun.

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