National Australia Bank said today it could take up to three years to fix its struggling European operations but denied it had any plans to sell them.
Analysts have said they believe a sale of the group's four banks in the UK and Ireland could be on the cards as National struggles to recover from a series of mistakes that have dented its reputation and earnings in recent years.
Chief executive Mr John Stewart conceded at a briefing after the group's half-year results that he had a history of dressing up assets for sale, but indicated National's British and Irish operations would not change hands for some time.
"If you look at my track record, if I think I can create more shareholder value by selling something rather than developing it, I will sell it," Mr Stewart, who took the top job three months ago, told reporters.
"Right now I don't think it's the right thing. We should repair these banks. We can create more value."
National, which has been rocked this year by a forex trading scandal and a damaging board row, reported a nine per cent drop in first-half operational profits today to A$1.85 billion ($1.29 billion), underperforming its main Australian rivals.
Cash earnings at its European operations - Clydesdale Bank in Scotland, Yorkshire Bank in England, Northern Bank in Northern Ireland and National Irish Bank - fell 30 per cent to A$394 million ($275 million).
Fund managers said NAB should consider exiting those markets to support its Australian operations.
"I wouldn't be surprised if we don't see a hastier sale of the UK (and Irish) assets than has currently been indicated," said BT Financial Group fund manager Mr Jack Chemello.
There has been speculation in Britain that HBOS and Royal Bank of Scotland Group might bid for NIB.