UPDATE: NAB Has Approaches On Participating In UK Consolidation

National Australia Bank Ltd. (NAB.AU) said Thursday it is looking at options to participate in the consolidation of the U.K. banking sector, where it owns the Clydesdale and Yorkshire banks.

The bank said it's had several approaches about capitalizing on the consolidation of the U.K. market.

"We have been approached by a number of players in the U.K. market to see how we could work with them to participate in that consolidation," the bank's Chief Executive Cameron Clyne told shareholders at the group's annual general meeting in Brisbane.

"We are going to explore and assess what value these approaches offer for NAB shareholders," Clyne said.

The admission came as NAB unveiled an agreed deal to buy wealth management group AXA Asia Pacific Holdings Ltd. (AXA.AU), in a deal valuing the target at A$13.3 billion, as the bank continues to push its wealth management strategy in Australia and New Zealand. Under its plan, it would sell AXA Asia Pacific's Asian operations to AXA SA (AXA) and keep the Australian and New Zealand businesses.

Clyne did not give any further details on the nature of the approaches in the U.K., but said the moves "indicate that in our Clydesdale and Yorkshire bank, we have a high quality asset that is an attractive platform for participation in U.K. market developments."

Earlier this year, Clyne said NAB would retain the two lenders despite speculation that it could offload them.

He told a business lunch last month that the bank was keeping a close eye on the potential break up of Royal Bank of Scotland PLC assets in the U.K., indicating its willingness to look at potential deals.

The AXA Asia Pacific deal comes amid increasing signs that the Australian economy has escaped the global financial crisis relatively unscathed, although NAB Chairman Michael Chaney said that risks remain.

"The board is cautiously optimistic about the outlook for the Australian economy, with positive signs continuing to emerge, although the potential for further economic shocks cannot be dismissed at this stage," Chaney told shareholders.

The group also expects funding costs to remain an issue for the sector, Chaney said.

-By Lyndal McFarland, Dow Jones Newswires; 61-3-9292-2093; lyndal.mcfarland@dowjones.com

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