National Australia Bank has been reviewing what to do with its substantial UK operation, Clydesdale - which also owns Yorkshire Bank and operates mainly in Scotland and the north of England - since January.

Because of an economic downturn in the UK described by NAB's chief executive Cameron Clyne as "longer and slower to recover than experienced in the 1930s following the Great Depression", the bank has decided to cut 1,400 UK jobs, pull out of commercial property lending here and concentrate on retail and small business banking.

Mr Clyne says "heightened weakness in the eurozone" is "in part" to blame.

It also announced that the UK operation has fallen into a small loss, of £25m - and will take a charge of £150m for property loans going bad, blaming a double dip in the commercial property market.

But NAB has apparently rejected the option of selling Clydesdale and pulling out of the UK.

Earlier this year, it received a takeover offer for the business from NBNK, which is also trying to buy 632 branches from Lloyds, and turned it down.

A source at NBNK tells me that if its offer had been accepted, there would have been fewer job losses.