NAB has been outperforming its peers in the last 12 months, posting the highest total return of 44%

NAB has been outperforming its peers in the last 12 months, posting the highest total return of 44%. NAB's underperformance in recent times has been attributed to its UK banking arm, with investors discounting the bank for holding the assets. However, in a reversal of fortunes, confidence and stability has returned to the UK banking sector. The UK bank index has climbed 35 per cent in Australian dollar terms, putting it ahead of the glorified Australian financials index. Considering the UK business exposure was only 2.4% of net profit, its effect has been surprising to some commentators, although its cost-to-income ratio is at 70%, much higher than the NAB group as whole which sits at 41%. The NAB's recent rise could indicate the end of the discount applied to the bank for its UK assets. (VIEW LINK)