Lloyds TSB eyes up Credit Lyonnais takeover bid

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The Independent Online
The banking sector was awash with merger rumours yet again yesterday. Lloyds TSB admitted to having run its ruler over Credit Lyonnais, the French bank, and Hambros, the banking group, said it was in talks to sell its estate agency and insurance arms, writes Lea Paterson.

It also emerged there would be "significant redundancies" in Hambros' core banking operations following their sale to Societe Generale of France.

In an interview with Le Figaro, the French newspaper, Sir Brian Pitman, chairman of Lloyds TSB, said he would like to buy Credit Lyonnais, but was put off by the regulatory and political climate in France. Sir Brian drew attention to France's "bureaucratic burden" and its inflexible labour market.

Lloyds has frequently expressed its desire for further acquisitions. At the presentation of the group's annual results a fortnight ago, Sir Brian said: "We are rapidly building up excess capital which we would prefer to use to make an acquisition. We are generating more than pounds 1bn in surplus funds."

Shares in Credit Lyonnais hit a three-year high in Paris yesterday as analysts took stock of Sir Brian's comments. The Paris financial community was said to be cheered by the prospect that the French bank could attract quality buyers when it is eventually finally put up for sale. The French government has to dispose of its majority stake in the bank before the year 2000.

Meanwhile, Hambros, the banking group, said it was considering a number of expressions of interest in its remaining businesses - Hambro Countrywide, the estate agency, and Hambros Insurance Services Group.

The group also said it had completed the sale of its core banking businesses to Societe Generale. The pounds 300m sale was first announced in December.

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