Credit Crunch: Australian Bank Adds £480m to Write-downs

National Australia Bank, owner of Clydesdale and Yorkshire, unsettled the banking sector yesterday by raising its credit crunch write-downs to A$1bn (£480m) and suffering the biggest one-day fall in its share price since the 1987 crash.

The fresh write-down of A$830m came as the Australian bank played down suggestions that it might take part in a break-up bid for the troubled mortgage lender HBOS.

"We're not sure this is a clever time to make acquisitions," said John Stewart, the former Barclays executive who runs NAB.

Shares in British banks, which are preparing to report first-half profits, were knocked, although HBOS and Barclays eventually ended the day higher.

At the end of a week in which the vast majority of its shareholders failed to support its rights issue, HBOS was said to be facing a bid from a consortium being put together by US bank JP Morgan. Earlier in the week HBOS had been cited as a target for Spanish bank BBVA.

NAB had been in talks to buy part of Royal Bank of Scotland's Australian businesses but pulled out last week.

RBS is close to selling its stake in the Tesco Personal Finance joint venture to the supermarket chain for as much as £1bn. Benny Higgins, a former executive of both HBOS and RBS, is thought to have been approached about running the venture.