A month or so ago NAB was forced to inject $600m into one of its UK banks, sucking capital away from that which would otherwise be used to protect Australian depositors. As with most other case studies of Australia's taxpayer-backed major banks trying to expand overseas, the moral of this story is that they are not very good at doing it, and appear to have no durable comparative advantage. Just ask ANZ what return on equity it is generating from its Asian operations--less than what they get in Australia, remarkably. Today Banking Day reports:
NAB fills another pension deficit at Clydesdale
27 January 2012 7:05am
The pension scheme at Clydesdale Bank continues to suck up capital from National Australia Bank. Scotland's The Herald newspaper reports that Clydesdale has tipped £130 million into its pension scheme. This is around a third of the additional capital subscribed by NAB to Clydesdale earlier this month. NAB is seeking to curb its wage bill in the UK by phasing out contributions to the older of its two pension schemes for half the staff working at Clydesdale Bank.
