National Australia Bank eyes RBS deal

NAB seeks inclusion in $3.3bln RBS acquisition as it attempts to win its AXA bid.

As National Australia Bank attempts to win over the competition regulator to approve its AXA Australia Pacific bid, the lender should find out as early as this week whether it has made it onto a shortlist to acquire a network of British branches put up for sale by Royal Bank of Scotland.

NAB is one of six buyers circling the 316-strong branch network, valued at up to £2 billion ($3.3 billion). While NAB is seen as a strong contender as it looks to round out its Glasgow-based Clydesdale Bank, others including Spain's Banco Santander and Richard Branson-backed Virgin Money are expected to emerge as its strongest rivals.

British media reported that once a shortlist of contenders is selected, due diligence can begin on the branch network, a process that is likely to take as long as six weeks.

The move comes amid signs of a pick-up for NAB's fortunes in Britain, with analysts tipping a recovery that could result in a profit surprise from Clydesdale Bank.

Macquarie Equities banking analyst Tom Quarmby expects easing funding costs and lower impairments could help the bank's earnings momentum.

View the full story in Sydney Morning Herald.