Nab May Go Back To Running A Brokerage

The Age

Saturday May 3, 2008

Scott Murdoch

A DEAL for National Australia Bank to buy the Australian stockbroking and wealth management arm of US banking giant Citi may be imminent.

The retail bank is believed to be in the final stages of due diligence.

Speculation has intensified that NAB will become the first retail bank in recent times to move back into equities dealing, after previous poor results of banks running brokerages.

The purchase may be sealed within the next few weeks and would see NAB absorb Citi Smith Barney, the retail broking and wealth management arm operated by the largest US bank in Australia.

BusinessDay believes NAB has been reviewing the books of Citi, and that staff at the bank are preparing for a takeover.

Citi is struggling to maintain its ranking among the world's top banks as it rebuilds its capital base in the wake of subprime crisis.

Retail banks in Australia have had a mixed history in operating retail brokerages. Commonwealth Bank is arguably the most successful through its retail online presence, CommSec.

Westpac was previously involved with Ord Minnett and NAB had A. C. Goode stockbrokers.

Interest will now shift to the price being offered for Citi Smith Barney, which has more than 200 financial advisers and a presence in most Australian capital cities.

There had been some thought that NAB might bid for the Australian operations of ABN Amro, the Dutch investment bank, after it was placed on the block following the purchase of its parent company by the Royal Bank of Scotland consortium.