Australian bank to bear cost of robbery

National Australia Bank (NAB) is to bear the impact of the £22 million (€31.49 million) taken in the raid on Northern Bank's headquarters in Belfast earlier this week.

The NAB group, the current owners of Northern Bank, has said it had no external insurance policy to offset the losses.

The group announced last week that it was selling both Northern Bank and National Irish Bank to Danish financial institution Danske Bank. However, the deal is subject to regulatory approval and is not expected to be completed until next spring.

NAB said in a statement to the Australian stock exchange that the robbery would have no knock-on effect on the sale.

A spokesman for Northern Bank said the system of self-insurance in relation to Northern Bank was "just normal practice" at NAB and had "never been an issue".

Northern Bank is the biggest retail bank in Northern Ireland, with about 2,300 employees, a network of 95 branches and 13 business banking centres.

It claims to have a 36 per cent share of the market for small and medium-sized enterprises (SMEs) and a 21 per cent share of the personal current-account market.

The bank has 415,000 retail and business customers and lending totals £3.2 billion (€4.57 billion).

Founded in 1824, Northern Bank began life as a tiny banking company called the Northern Banking Partnership, which was based in Belfast. The bank significantly expanded its branch network in the Republic during the 1970s.

The NAB group, the largest financial services company in Australia, bought Northern Bank, along with Scottish bank Clydesdale, from Midland Bank in 1987 in a deal worth almost £390 million sterling.

A separate banking operation was formed out of the branches based in the Republic, which were renamed National Irish Bank.

The NAB group will continue to provide transitional services in respect of Northern Bank and National Irish Bank in order to assist the smooth transfer of ownership to Danske Bank once the €1.4 billion deal is completed early next year.

These transitional services are expected to be in place for 18 months.

Announcing the sale last week, NAB chief executive Mr John Stewart said it opened "an exciting new chapter" for the two Irish banks and for Danske.