National Australia Bank is closer to a long-awaited exit from the UK after selling off more than $2 billion worth of higher risk loans.
It will sell STG1.2 billion ($A2.19 billion) of non-performing loans from its UK commercial real estate portfolio to Cerebus Global Investors.
NAB has been reducing the size of the portfolio Since 2012, taking it from STG5.6 billion to just STG836 million, and the latest sale will eliminate most of the higher risk loans.
Chief executive Andrew Thorburn said the move was part of NAB's plan to exit the UK, which has long been a drag on the group's performance.
NAB took a hit of more than $1 billion in the 2013/14 fiscal year from writedowns and provisions linked to the UK business.
That contributed to a fall of almost 10 per cent in annual cash profit to $5.18 billion.
"The sale of these higher risk loans in the NAB UK CRE portfolio is another important milestone in our strategy of reducing our low returning legacy assets and sharpening our focus on our core Australian and New Zealand franchises," Mr Thorburn said.
"Pleasingly, the remaining NAB UK CRE loans are largely strong performing loans, and we will look at other options to manage this small remaining portfolio."
Mr Thorburn indicated in October NAB was considering a float of its UK business, which includes the Clydesdale and Yorkshire banks.
The bank has also floated its Great Western Bank subsidiary in the US, and plans to sell down its entire holding there in time.
NAB shares were down four cents at $31.44 at 1520 AEDT.
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