NAB seeks partners to bid for Lloyds branch

The lender mulls to spin off existing UK assets to JV as it woos NBNK and BBVA for partnership.

National Australia Bank is in talks with potential partners to jointly bid for 600 UK Lloyds Banking Group branches as it considers bulking up prior to an exit from Britain in 3 to 4 years, two sources said.

NAB, Australia's top lender, is in talks with a number of firms, including NBNK Investments Plc and Spain's BBVA, the people with direct knowledge of the early discussions said.

If NAB wins the bidding with a partner, it plans to spin off its existing UK assets into a joint venture and wait for favourable market conditions to steadily sell down its stake in the venture, the sources said.

The sources declined to be named as talks are confidential and may or may not succeed.

Lloyds, 41 percent owned by British taxpayers, has been ordered to sell the 600 branches by European competition authorities. But this week a powerful UK panel said it should sell more.

"NAB clearly does not want to put in big money in UK. It looks at it as a market fraught with risk and low growth. But they cannot sell the existing UK operations too now," one source said referring to the 400 branches NAB has in UK.

View the full story in Reuters.