01 November 2012 7:08am

A year ago, 9.1 per cent of the loans in National Australia Bank's United Kingdom commercial real estate book were classified as impaired. At the end of September the level of impairment had climbed to 16.4 per cent. This figure alone explains why NAB's UK business is getting the bank into strife.

National Australia Bank's bad debt charge rose 43.5 per cent over the year to the end of September – from A$1.8 billion to $2.6 billion. This included a $250 million economic cycle adjustment, reflecting the bank's view that business conditions in Australia and the United Kingdom are...