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NAB sells additional $1.9b in UK property loans to Cerberus

  • Andrew Woodman
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National Australia Bank (NAB) is selling another GBP1.2 billion ($1.9 billion) parcel of distressed UK real estate loans to New York private equity firm Cerberus Capital Management.

The sale comes from NAB's UK Commercial Real Estate (CRE) portfolio and is expected to to release about GBP127 million in capital for the group, according to a statement.

NAB's UK CRE portfolio will be reduced to GBP836 million, compared to the original balance of £5.6 billion in October 2012 when the portfolio run-off was first established.

The deal comes around five months after NAB - which owns the Clydesdale and Yorkshire Banks in the UK - sold GBP625 million of loans to Cerberus from the same portfolio. This earlier transaction - reported to be worth GBP485 million and representing a 28% discount on the loans' face value - reduced the CRE portfolio by 20% to GBP2.38 billion.

Andrew Thorburn, NAB's group CEO, said that the disposal was an another important milestone in NAB's strategy for reducing its low returning legacy assets and shifting its focus back onto its core Australian and New Zealand franchises.

"Pleasingly the remaining NAB UK CRE loans are largely strong performing loans," he added. "And we will look at other options to manage this small remaining portfolio."

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