National Australia Bank (NAB) has confirmed that it is evaluating several expressions of interest to buy National Irish Bank (NIB) and Northern Bank, but it will only sell for the right price.
In a statement issued to the stock exchange yesterday, NAB's chief executive, Mr John Stewart, said the banks' future was being assessed as part of a wide-ranging review of its European operations, but that no decision has been made to sell them.
"The Irish businesses are excellent businesses with great potential. However, given these expressions of interest, we believe it is in shareholders' interest to explore this option," Mr Stewart said.
NAB is being advised by Lazard, which has distributed information memorandums to a number of financial institutions that have requested details to "test the market", it said.
"If we do not receive an offer that reflects the true value and potential of the Irish businesses, we will continue to invest in them and to grow them organically," Mr Stewart said.
The review, which also includes its UK banks, the Clydesdale and Yorkshire, is part of its efforts to improve shareholder value.
"We will continue to focus on growth in our businesses and are confident that they can generate value for the National."
Halifax Bank of Scotland, which owns Bank of Scotland Ireland, is viewed as the front runner to acquire the two banks, which would suit its ambitions to expand into retail banking in the Republic.
Irish Life & Permanent has said it was interested in acquiring NIB but has ruled out buying Northern Bank.
NAB is expected to favour selling both banks together as they are both run by the same management team and have integrated systems.
Bank of Ireland, which has a substantial interest in the Northern Ireland market, may have an interest in acquiring the banks but it is likely to run into problems with the competition authorities because of its significant business in the North.
Royal Bank of Scotland, which owns Ulster Bank and First Active in the Republic, is seen as less likely to make a bid.
The two banks are estimated to be worth about €1.2 billion.
Yesterday, the Irish Bank Officials' Association (IBOA) demanded the protection of its members' jobs at both banks in the sale process.
IBOA general secretary Mr Larry Broderick said the trade union was extremely disappointed at the decision to sell the two banks, which has left staff feeling let down by its Australian parent.
"Despite their loyalty and support over many years, it would appear they will now be auctioned off to the highest bidder," he said.
The IBOA has arranged meetings with Mr Don Price, who heads NAB's Irish operations, and its European chief, Mr Ross Pinney, to ensure that staff concerns are prioritised.
