National Australia Said to Target September IPO for U.K. Arm

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Andrew Thorburn
National Australia CEO Andrew Thorburn. Photographer: Jeremy Piper/Bloomberg

National Australia Bank Ltd., the nation’s fourth-largest lender by market value, plans to seek about 800 million pounds ($1.2 billion) in an initial public offering of its British unit as early as September, people with knowledge of the matter said.

JPMorgan Chase & Co. is poised to join Morgan Stanley and Macquarie Group Ltd. in managing the sale of as much as 30 percent of the unit, said the people, who asked not to be identified because the information is private.

A sale of the Yorkshire Bank and Clydesdale Bank operations will rid National Australia of a business that was responsible for two declines in full-year profit since 2009 as local competitors posted record earnings. The exit will allow the Melbourne-based lender to focus on its Australian and New Zealand businesses.

National Australia Chief Executive Officer Andrew Thorburn flagged the lender’s intention to exit the U.K in October. Last month, he said the lender plans to distribute as much as 80 percent of the British unit to existing shareholders and sell the rest through an IPO to institutional investors.

Shares of National Australia fell 1.5 percent to A$31.85 at the close in Sydney, valuing the lender at A$83.3 billion. Spokesmen for the company, JPMorgan, Morgan Stanley and Macquarie in London declined to comment on the IPO plans.

National Australia said last month it agreed with the U.K.’s Prudential Regulation Authority to inject 1.7 billion pounds of capital into the unit as part of the disposal. It is raising A$5.5 billion ($4.3 billion) through a rights offering to fund the infusion.

The British unit posted a 41 increase in profit excluding one-time items to A$184 million in the six months ended March 31. The parent posted cash earnings of A$3.32 billion in the period.

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