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NAB lashes out over downgrade
Evening Standard 4 Aug 2008
National Australia Bank, owner of the Clydesdale and Yorkshire brands, has railed against a credit ratings downgrade after revealing a big hole in its books due to the subprime crisis.
Ratings agencies Moody's and Standard and Poor's both downgraded their outlook on NaB's credit rating to negative.
But NaB chairman Michael Chaney says the bank is in "very strong" shape and a downgrade is inappropriate. The bank, led by former Woolwich boss John Stewart, revealed an a$830 million (£390.5 million) writedown on US residential mortgage assets that could leave a a$600 million hole in profits.
"We certainly don't believe any downgrade would be appropriate,"Chaney said. "Things are going extremely well."
Some banking analysts have warned they expect NaB to make further provisions against another a$4.5 billion in collateralised debt obligations. On the global credit crisis Chaney admitted that "It's possible the situation will get quite a bit worse."
