Clydesdale jobs on the line as NAB considers options

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NAB chief executive Cameron Clyne said the view of the UK from the other side of the world had deteriorated, meaning there was "a much longer period of subdued growth" expected, in part due to the Government's austerity programme. He added that UK growth of just 0.2% in the final quarter of 2011 was much lower than in other countries in which NAB operated.

Clydesdale has been up for sale for almost two years with a mooted price tag of more than £2.5 billion. In that time Virgin has bought Northern Rock for £747 million, Co-op Bank is lined up to buy 632 branches from Lloyds for around £1.5 billion and Royal Bank of Scotland has sold 318 branches to Santander for £350 million.

The only obvious remaining buyer - Lord Levene's vehicle NBNK - appears to have gone cold on Clydesdale, which at one point it looked at combining with the Lloyds branches sold under Project Verde.

Clydesdale said today its bad debt provisions had jumped to 1.27% of gross loans from 0.86% in the previous six months as both retail and small business customers felt the pinch.

Clyne acknowledged that a straight sale of Clydesdale was now less likely. He said: "The review will assess many options and it's still too early to determine the recommendation. We can say that retaining the existing business mix and structure will not be an outcome." He promised to reveal the result of the review by May.

Credit Suisse analyst James Ellis said: "It's very difficult to achieve book value in a divestment in the current environment - it would therefore seem unlikely that's what the strategic review would seek near-term."

Clydesdale employs more than 8000 people and runs just over 300 branches under its own and the Yorkshire Bank brands. Pre-tax profit fell from £49 million to £21 million in the year to November, although that was after a £116 million provision for mis-selling payment protection insurance.

NAB injected another £100 million of extra capital into Clydesdale, on top of £400 million it put in early last month.