The Clydesdale and Yorkshire banks' exposure to bad debts has risen due to the problems in Britain's commercial property sector. The UK economy continues to face challenges. The ratio of bad and overdue loans had risen to 2.9% from 2.6% of lending; a trading statement on the final quarter of 2009 confirmed this report.

The 2 British banks which work under National Australia Bank operate as one unit, and said that they were approaching the situation differently from the larger banks and thus helping them maintain a stronger position in the financial crisis. The competition for saving remained strong said the two banks where as the operating income was under pressure.

They are firmly focusing on growing their existing business and said that the current signs of recovery in the global markets are quite encouraging.

Cameron Clyne, Melbourne-based chief executive of National Australia Bank, said: "Our UK business remains well-positioned to benefit from any improvement in operating conditions."