NATIONAL Australia Bank has pledged not to engage in a "desperate fire sale" of "problem asset" Glasgow-based Clydesdale Bank but said its turnaround was "a work in progress".

A management shake-up at NAB has left Clydesdale chief executive David Thorburn in place although group finance director Mark Joiner, a Briton appointed to the Clydesdale board last year, is to leave before the end of 2013.

Meanwhile, a restructuring plan aimed at saving A$800 million (£553m) a year will focus on Australia, leaving the UK business to work through its issues.

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"The UK is clearly a problem asset," NAB chief executive Cameron Clyne told analysts. "But there have been very, limited options that we could have undertaken."

Mr Clyne, who became chairman of Clydesdale in July, said NAB had decided to take a long-term view of its UK operation.

"The vast majority of our shareholders do not support us engaging in a desperate fire sale," he said. "We will continue to manage the UK. There may be a point that we cut and take some issue with the UK but I don't think that is practical."

A spokesman for Clydesdale said: "The focus of the announcement was a technology and strategy update centred on the Australian geography, along with changes to the group executive. The announcement made clear there is no change in UK banking and that our restructure is well advanced."

Mr Thorburn is overseeing a turnaround plan for Clydesdale that will see it retrench to its heartlands in Scotland and northern England, where it operates as Yorkshire Bank, while closing its UK-wide portfolio of business centres.

This appears to be making some progress with NAB reporting last month that Clydesdale was enjoying an improved financial performance as bad-debt levels declined.

Mr Clyne said there had been substantial improvements at NAB but added: "We are not as happy with all parts of the business as we could be. The UK continues to be a work in progress."

There has long been speculation about a potential sale of 175-year-old Clydesdale by NAB, which bought the Glasgow-based bank in 1987 and added Yorkshire Bank three years later. The pressure has ramped up recently as Australian investors and analysts complained its share price was depressed by poor prospects in the UK. Meanwhile institutions from Spain's Santander to short-lived start-up bank NBNK are understood to have taken a look at the business.

Mr Clyne, who was appointed NAB chief executive at the beginning of 2009 said: "It would have made my life much easier to toss it (Clydesdale) overboard on January 1, 2009."

However, he said NAB wanted to "trade out" Clydesdale's problems. "What I am particularly pleased about is that this management team did not take the short cut of trashing shareholder value and dumping the asset," he said.

But he added: "Our divestment options did remain limited." He said NAB was unable to predict the double dip in the UK economy and the downgrade of Clydesdale by credit rating agencies.

Mr Clyne told the analysts that Clydesdale had cut 1079 of the 1400 posts it hopes to. This will cut its UK workforce to 6900 by 2015.

Clydesdale has previously said it expects 100 jobs to go in Scotland.

NAB said its restructuring strategy is needed to adapt to the changing needs of its customers and to capitalise on their links to Asia.