National Australia Bank Ltd (NAB) has ditched its plans to buy the local arm of Dutch investment bank ABN Amro, without giving any reasons.
In a blunt, two-sentence announcement to the Australian stock exchange issued an hour after trading concluded, NAB said it had "now withdrawn from the sale process".
It is the second time Australia's second biggest bank has struck out on buying a broker after talks with Citigroup were widely understood to have fallen over in May.
NAB has never confirmed the speculated Citigroup talks, but on July 11 it revealed it had entered discussions to buy ABN Amro's Australian and New Zealand operations.
Commonwealth Bank of Australia Ltd and Japan-based Normura Group have also been rumoured to be in the running.
Speculated valuations on the local business have ranged from $500 million to $1.3 billion and it is possible that NAB and ABN Amro couldn't agree on a final sale price.
NAB said at the time it announced the talks that there was no certainty that a deal would be sealed.
"Any potential transaction would be subject to due diligence and, ultimately, the receipt of all relevant regulatory approvals," it said.
Dutch-based ABN Amro was acquired in November by a consortium including Royal Bank of Scotland for around $100 billion, the biggest banking takeover deal in world history.
Buying the group's local operations would have given NAB an equities dealing capability for the first time since the early 1990s and distinguished it from the other major commercial banks.
ABN Amro and US-based Citigroup have been hurt by the global credit crunch and are considering selling non-core assets to strengthen their balance sheets.
Citigroup, however, said that it was committed to its local broking arm after its talks with NAB were thought to have ended.
ABN Amro would have complemented NAB's corporate and institutional banking business, NAB Capital.
It would also give NAB's wealth management arm MLC another 200 highly sought after financial planners amid a superannuation boom and a shortage of talent.
NAB had to notify the market about the ABN Amro talks because it was underwriting its dividend reinvestment plan. By not mentioning any other takeover discussions, the bank revealed that it was currently not pursuing takeovers of St George Bank Ltd or foreign-owned BankWest.
