National Australia Bank must now be seriously considering its future in the Irish market. The investigations under way into the direction of National Irish Bank deposit funds to the Isle of Man-based Clerical Medical International are just the latest factor to concern NAB.

A deeper concern must be its failure to conclude the proposed deal to buy the TSB Bank. NIB is NAB's only Irish pound operation. It has about 3 per cent of the Irish banking market against a target level of 6-10 per cent. Increasing market share through organic growth would be difficult in a competitive environment. With its acquisition aspirations frustrated and maybe made more difficult by the CMI investigations, NAB may exit the market. NIB could raise £150£200 million for NAB. Against a background of an Australian economy facing a possible downturn repatriating this capital could prove attractive to NAB.