Jason Nissé: When the banks have finished bluffing, the bid battles will begin

A few months ago I was discussing Call My Bluff, the 1970s quiz show starring Frank Muir and Robert Robinson, with some friends. They pointed out that it had not died but had been relegated to daytime TV and now features such minor celebrities as Sandi Toksvig and Bob Holness. Well, now it is making another appearance – in the half-yearly results presentations of Europe's banks.

The last few days have been ones of unrelenting misery for anyone investing in the banking sector. Barclays, Lloyds TSB, Société Générale, BNP Paribas, Deutsche, Allianz, San Paolo, Santander, Uncle Tom Cobley et al have been telling us tales of woe, warning of write- offs and bankruptcies, capital raisings and trading losses. What can it all mean? Is the end of the world nigh?

Not at all. What we are seeing is an elaborate game of pre-restructuring posturing. There is a desire – maybe even a need – for European banking to consolidate. There have been deals within countries – Lloyds buying TSB, Royal Bank snaffling NatWest, Allianz hoovering up Dresdner – but nothing really decent across national borders.

As the walrus said, the time has come. Admittedly, Lloyds TSB has been looking for a European deal for a couple of years, without success, but now it has been joined in the hunt by some other big guns, notably Barclays, ABN Amro and BNP. Others that might once have been driving consolidation, such as Deutsche or Fortis, are instead looking more like prey. After all, Deutsche is now worth some €3bn (£1.9bn) less than HBOS in market valuations. It could be, as they say, "cheap for a reason". Or it could be merely "cheap".

So why, when there are clear hunters and targets, is everyone crying wolf?

There are two strategies. Barclays' decision to make large loan-loss provisions was a classic case of saying: "If this is how bad it is for us, and we're the good guys of the banking sector, think of how bad it is for the rest." If this works, it pushes down the value of the target relative to the prey.

Meanwhile, Josef Ackermann at Deutsche, giving a dire warning about European bankruptcies, is saying: "It's a bloodbath out here. You don't want to get involved."

But they do. They do. The British banks are banging their heads against their regulatory limits in Blighty. Sure, Barclays is eyeing Bradford & Bingley, but that is a tactical move to get around the horrors of "polarisation" in selling financial services. But Abbey National, which is sitting up and begging to be taken over, cannot be bought by a local rival. It needs to look abroad for a bidder. Everyone else needs to look abroad for a target.

A brave bank will be the first to strike a deal. This will be followed by a mad scramble. Banking will never be the same again.

Telewest needs to tart itself up

There is no element of bluff in the debt-ridden world of cable TV. Telewest and NTL are stumbling towards each other like two drunks in a singles bar, reckoning that going home together is marginally better than sleeping alone.

Last week's departure of Adam Singer makes little difference to Telewest's strategy. By my count, the new boss is the fifth chief executive in less than a decade, making the churn of helmsmen at Telewest even higher than the churn of subscribers. Telewest has bet what's left of the farm it once owned on persuading UK householders to sign up for broadband internet services. According to industry expert Continental Research, there could be up to 700,000 new homes taking broadband in the next 12 months. But with BT's advertising push, and Telewest's terrible customer service operations (I know, I'm a former customer), I wonder what fraction of this Telewest will be able to obtain. It also needs to go through a debt restructuring and has John Malone, the US cable TV tycoon, trying to wrest control of what's left of the company.

The irony is that, having declared Chapter 11 bankruptcy with a level of debt to rival Argentina, NTL is now in a better situation. If all goes well – a big "if", I admit – the company will emerge from Chapter 11 in October. Barclay Knapp and Stephen Carter, the NTL bosses, are hot to trot. They are the ones who have ordered the taxi back to their place. It is now a case of Telewest getting well enough prepared to consummate the courtship.

j.nisse@independent.co.uk