Lower-than-expected earnings at London-based National Westminster Bank PLC have raised the possibility that it is thinking about selling its U.S. retail unit, National Westminster Bancorp.

On Tuesday, the London-based Financial Times quoted Lord Alexander, National Westminster's chairman, as saying that it would be prepared to entertain a bid, but that "there is not a for-sale notice hanging up on Bancorp."

In an interview Wednesday, John Tugwell, chairman and chief executive of the U.S. operation, said there were no immediate plans to sell it and no feeling that it had to be sold just because neighboring banks were merging.

However, Mr. Tugwell said, "obviously, if a fabulous offer came, we would consider it." That goes for "every part of the bank," he added.

Analysts expressed skepticism that a sale would occur soon. They noted that the U.S. operation is now solidly in the black after several years of difficulty, and that the British bank is more likely to try to bolster returns from the Jersey City, N.J.-based unit before considering a sale.

"They've put a lot of money into the U.S. unit and they believe they can push more products and increase their return," said Marc R. Pinto, associate director for financial institutions at Fitch Investors Service Inc.

"Profitability at the U.S. unit has been really strong and looks like it can be sustained going forward."

On Tuesday, Natwest's U.K.-based holding company reported profits of $1.4 billion, up from $1.23 billion a year earlier but below analyst expectations of $1.47 billion.

Analysts said the slower-than-expected improvement could be attributed to tightening profit margins, sluggish demand for loans, and a decline in fees and commissions.

Net income for the second quarter fell to $63 million from $76.2 million, and half-year earnings to $118.5 million from $138.8 million after the bank used up tax deductions. But pretax earnings rose 38% to $115.1 million for the quarter, and were up 42% for the first six months ended June 30, to $217.5 million.

The U.S. subsidiary's results included revenues from Citizens First Bancorp and Central Jersey Bancorp, two recently acquired banks.

Derek Wanless, chief executive of the London-based parent, said in an interview that the bank would consider further small-scale acquisitions in New Jersey and adjacent markets. But, he said, any larger deal was unlikely.

"We wouldn't accept paying silly prices we couldn't justify," he said.

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