HBOS was thrown under the takeover microscope for the second time in 48 hours yesterday as speculation escalated that a consortium might mount a carve-up takeover bid.
US banking giant JP Morgan would not comment on rumours that it had talked to a large Australian bank, believed to be Clydesdale-owner National Australia Bank (NAB), about a joint move on the Edinburgh-based bank.
It has also been reported that
JP Morgan had talked to private equity players, and may approach Spain's Banco Santander as a potential partner.
However, it is understood no consortium has yet been formed and HBOS has not received any approach.
On Wednesday, the Scots bank's shares surged 16 per cent, adding more than £2 billion to its market value, after it was reported that Spanish bank BBVA was targeting it as a takeover bid. HBOS's shares yesterday lifted almost 3 per cent to 310.25p.
NAB, which also owns Yorkshire Bank, appeared to play down the speculation yesterday.
Scots-born chief executive John Stewart, below, said: "We're not sure this is a clever time to make acquisitions."
He was speaking as NAB also announced a further A$830 million (£398m) in losses from its exposure to US mortgages.
NAB could be a buyer of HBOS's Australian arm, Bankwest, and may also be interested in its corporate banking unit, spearheaded by Bank of Scotland, analysts said.
However, one added: "I have a couple of doubts on this. This is only superficially like another ABN Amro (the Dutch banking giant bought and broken up by a Royal Bank of Scotland-led consortium last year].
"ABN was a rag-bag of unconnected businesses. But you could argue 80 per cent of HBOS – the retail and business banking divisions – is inextricably linked.
"It collects deposits through the retail arm and then lends it through commercial banking."
Leigh Goodwin, banking analyst at Fox-Pitt, Kelton said: "I don't think anybody thinks HBOS is going to get bought. I think it's more likely that they would potentially sell bits."
Analysts reckon HBOS disposals could include Bankwest, asset management unit Insight and insurance arm Clerical & Medical, as well as its 60 per cent stake in wealth manager St James's Place.
Goodwin said he thought the cost of funding HBOS' core UK mortgage operation, via the market-leading Halifax brand, would deter potential acquirers. One banking industry source agreed, saying: "NAB has a £220bn balance sheet compared with one three times bigger at HBOS, about £670bn.
"It would be difficult to fund this at any time but nearly an impossible task in the current credit drought.
It is also thought Santander would face major competition hurdles if it tried to take over HBOS' mortgage business.
Santander has just mounted a recommended takeover bid for Alliance & Leicester and together with its existing Abbey subsidiary has a 12 per cent share of the UK mortgage market.
Taking over Halifax would give it a 32 per cent slice. HBOS, NAB and Santander all declined to comment yesterday.
The speculation capped a fast-moving week for HBOS. On Monday, HBOS announced that its £4bn rights issue had been taken up by just 8 per cent of investors.
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The full article contains 543 words and appears in The Scotsman newspaper.
