Shares in the National Australia Bank were sold off more than 3% yesterday in the general sell-off as the bank confirmed its latest expansion move in America.
The National confirmed yesterday that it had picked up around $2 billion in assets and loans in TierOne Bank in Nebraska.
But it made no comment on the widely reported stories from the UK that it had abandoned its pursuit of branches and business from the Royal Bank of Scotland.
NAB shares ended down just over 3% at $23.63, a fall of 74c on the day.
The NAB said its Great Western bank had acquired US loan and deposit assets for a cash payment of $US76 million ($90.31 million).
"The acquisition includes all of TierOne’s approximately $US1.9 billion in deposits and $US1.9 billion in loans under an agreement by which the FDIC absorbs 80 per cent of credit losses arising on the loan portfolio and related assets," the bank said.
"The loss share agreement has a term of ten years for residential mortgages and five years for all other loans.
"The acquisition is earnings accretive and the GWB loan portfolio remains more than 100 per cent deposit funded following the acquisition."
NAB said the purchase would require less than 10 basis (0.10%) points of Group TierOne capital.
"This acquisition is aligned with our US strategy and is a financially attractive bolt-on opportunity," NAB group executive Asia, New Zealand and the US, Andrew Thorburn, said in the statement.
Greater Western Bank had an option to purchase TierOne branches at fair market value, or assume the relevant leases, and make employment offers to TierOne employees.
TierOne has 69 branches located in Nebraska, Iowa and Kansas.
"Great Western Bank has a strong risk framework supported by the appropriate local and NAB Group resources to manage the acquired loan portfolio, which has been reviewed in detail," Mr Thorburn said.
"We announced our intention to acquire part of TierOne in 2009 and this is an excellent opportunity to continue to grow our business in the United States on the base of attractive core deposits."
The losses and and corporate structure of TierOne remain with the FDIC.
