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 deteriorating.The rest of the charge "mainly reflects business lending losses in UK Banking as a result of prolonged weakness in the UK economy", the bank said.The increased charge also "reflected additional provisions in Business Banking for several long-standing corporate customers."The $2.6 billion charge was made up of a specific charge of $2.7 billion (up from $2.1 billion). This was offset by a write-back of $139 million from the collective provision.As a percentage of gross loans and acceptances, the charge increased from 38 basis points to 52 basis points.Overall asset quality measures also show a weakening trend. Loans past due by 90 days or more rose from $2.15 billion to $2.4 billion. As a percentage of gross loans and acceptances, loan past due by 90 days rose from 45 basis points to 47 basis points.The bank said the increase was "mainly driven by prolonged weakness in the UK Banking commercial property portfolio."Gross impaired assets fell from 1.32 per cent of gross loans and acceptances in September last year to 1.24 per cent in March, but then climbed back to 1.31 per cent at the end of September. NAB chief executive Cameron Clyne said: "The UK has been a significant drag on returns this year. But we've made good progress with structure in the business and positioning it to benefit from economic recoveries."