Bank of Scotland in line-up of potential bidders for Norway's Christiania Bank

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The Independent Online

Bank of Scotland has emerged as a potential bidder for Christiania Bank, Norway's second-largest banking institution. The Norwegian government, which owns 35 per cent of the bank, appointed Schroder Salomon Smith Barney, the investment bank, last year to find a buyer and is hoping to complete the auction next month.

Bank of Scotland has emerged as a potential bidder for Christiania Bank, Norway's second-largest banking institution. The Norwegian government, which owns 35 per cent of the bank, appointed Schroder Salomon Smith Barney, the investment bank, last year to find a buyer and is hoping to complete the auction next month.

Christiania has a market value of 3.3bn euros (£1.98bn) putting it well within the reach of Bank of Scotland with its £7.6bn market capitalisation.

Bank of Scotland, which faces tough questions about its future strategy when it presents its half-year results to the City today, is one of a number of foreign banks which are believed to have been approached by Salomons in an attempt to drum up non-Scandinavian interest.

The successful bidder for the government's stake will be required to mount a full bid.

Bank of Scotland yesterday refused to confirm whether it had been approached about a bid for Christiania. However, a bank source said yesterday: "We are aware of it. We look at a lot of opportunities."

Bankers say that while a Scandinavian bank would be the most obvious partner for Christiania, a bid for the Norwegian bank would provide an opportunity for Bank of Scotland to break out of its current strategic impasse and acquire a well-managed operation in one of the more technically advanced European banking markets.

Bank of Scotland already has a controlling stake in Australia's BankWest but has struggled to convince the City that it has a credible international strategy. In an attempt to diversify out of an increasingly competitive UK lending market, the Scottish bank has recently launched Net-based mortgage operations in Holland and Ireland and has been looking at low-cost ways of breaking into other smaller European markets.

Peter Burt, Bank of Scotland's chief executive, told Reuters last week that the bank was still looking at acquisitions.

The decision to seek an overseas buyer for the Norwegian government's stake in Christiania was sparked by bid tabled last year by MeritaNordbanken, the Nordic banking giant which is opposed by the Norwegian government. As well as Bank of Scotland, banks thought to be interested include Svenska Handelsbanken, Sweden's biggest bank and ING, the Dutch bank-insurance giant.

Christiania has a strong internet operation which could be used as springboard into other Scandinavian states. Christiania also has a large corporate banking operation which is heavily involved in lending to the oil and shipping industry.

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