ASX Announcement - National Australia Bank Announces Plans for Businesses in the United Kingdom - 30 March 2005

National Australia Bank today announced a range of initiatives as part of its ongoing program to rebuild, revitalise and grow its banking operations in the United Kingdom.

The National's Chief Executive John Stewart said work in the United Kingdom was progressing well to restart revenue and improve efficiency while enhancing the focus on customer service.

"In February we outlined the overall United Kingdom strategy and now we can provide detailed plans on how we intend to deliver on those strategic objectives," Mr Stewart said.

"The integration of our Australian retail banking, corporate banking and wealth management businesses is a separate program that is still under development.

"The Australian program is following consistent principles of building capability to better serve our customers, removing unnecessary processes and simplifying procedures to create efficiencies, and reducing the size of the corporate centre as part of the move to a regionally focussed business model.

"We will provide an update of the progress of this work at the half year profit announcement," he said.

The National's UK Chief Executive Lynne Peacock said:

"We have completed the sale of our Irish operations, and are now concentrating on ensuring our UK businesses are more nimble and customer focussed.

"We have made it clear that we are committed to a strong presence in the UK, but to do so we must change the way we do business.  All areas of our existing operations have been under review and we are moving quickly to implement the changes necessary to create an efficient, competitive business that delivers leading products, great service and lasting shareholder value."

Mrs Peacock said to cover the initiatives currently underway in the UK operations the National would book a provision of approximately A$266 million (£109 million) in the 2005 half year financial accounts. (Australian dollar values are based on an exchange rate of A$ =£0.41)

The provision will cover costs expected to be incurred on streamlining of operations which will lead to reductions in staffing levels and the reconfiguration of the distribution networks to meet the changing needs of our customers.

The annualised savings from the restructuring initiatives are expected to be approximately A$285 million (£117 million).

Mrs Peacock said the process of streamlining operations was well underway. The restructuring would lead to a total reduction of approximately 1700 positions across the UK during the next 12 to 18 months. All areas of the business are subject to the review but the majority of positions affected are non customer facing roles.

"We are already five months into this process, which is partially offset by natural attrition and redeployment. Restructuring changes have already been communicated to approximately 400 UK staff. The union has been informed of the restructuring plans and the existing job security agreement between the Bank and the union covers the intended changes."

Mrs Peacock said key aspects of the National's UK growth program are:

• the continued expansion into the south east of England via a network of Financial Solutions Centres offering integrated business, private banking and wealth management services to operators of small to medium sized businesses.  15 centres have been opened in the south east region and a further 15 will be opened by the end of 2005.
• the extension of the integrated Financial Solutions Centres business model into the north by converting approximately 40 existing Yorkshire Bank and Clydesdale Bank business banking centres;
• the re-alignment of the Group's High Street branch presence to reflect changing customer usage and needs, including the establishment of 50 "flagship" branches in key centres, which will also offer banking services to the micro-business segment;
• a simplified product range, more product support and actively managing margins down to market levels;
• third party distribution of mortgage products;
• investment in the Clydesdale and Yorkshire Bank brands and in electronic and direct channels, such as telephone and internet banking; and
• a broad cost reduction program involving process simplification, centralising workloads, rationalising management structures and consolidating technology platforms.

The National's half year results will be announced on 11th May.

For further information:

View the UK Plans - Analysts briefing pack or call

Brandon Phillips
Group Manager
Group Corporate Relations
03 8641 3857 work
0419 369 058 mobile 

Samantha Evans
Group Communications Adviser
Group Corporate Relations
03 8641 4982 work
0404 883 509 mobile

Callum Davidson
Head of Group Investor Relations
03 8641 4964 work
0411 117 984 mobile