NAB reaps $1.1b from UK bad loans sale

National Australia Bank has reaped $1.14b from the sale of bad loans from its British commercial real estate business.

National Australia Bank has reaped $1.14b from the sale of bad loans from its British business. (AAP)

National Australia Bank has sold a slice of its British commercial real estate loans portfolio for STG625 million ($A1.14 billion).

NAB said the portfolio of non-performing loans, which are either in default or near maturity, was sold to an affiliate of US-based private equity firm Cerberus Global Investors.

NAB Group chief executive Andrew Thorburn said the sale was in line with the bank's plan to sell non-core assets.

"We've progressively reduced our exposure to UK commercial property loans through organic run-off," he said in a statement on Monday.

"This sale represents a substantial de-risking of the non-performing portion of the NAB UK CRE portfolio."

The bank said the sale would remove a lot of risk from its commercial loans portfolio in the UK.

The gross loans balance of the portfolio fall 20 per cent to STG2.38 billion, while gross impaired loans will drop by 48 per cent.