National Australia Bank Ltd. and Banco Bilbao Vizcaya Argentaria SA of Spain are in talks about a joint venture to expand in the U.K. banking market, including bidding together for 318 branches being sold Royal Bank of Scotland Group PLC, people familiar with the situation said Monday.
The talks are still in preliminary stages and other options remain open, one of the people said.
A person familiar with the situation has told Dow Jones Newswires that BBVA, although interested in the U.K. market, did not see the RBS branches as the right opportunity, since they do not include supporting operations.
Instead, it would be better positioned to buy a complete bank spun off from the fully nationalized Northern Rock PLC that would be put up for sale under a government plan.
Although NAB can comfortably buy RBS' assets on its own, it sees a tie-up with BBVA as a chance to also look into Northern Rock's assets and 600 branches being sold by U.K.'s Lloyds Banking Group PLC, according to people familiar with the situation.
The two banks are competing for the RBS operations with Banco Santander SA of Spain, which already has 1,300 U.K.branches.