Hopes that struggling buy-to-let lender Bradford & Bingley could find shelter from the financial storm in a takeover by a bigger bank helped its shares soar today.
B&B soon rose nearly 20 per cent (falling back a little later) after weekend reports suggested possible tie-ups with Spain's Santander - owner of Abbey and Alliance & Leicester - Dutch banking group ING, and Yorkshire and Clydesdale Bank owner National Australia Bank.
The Financial Services Authority (FSA) is said to be keen to broker a deal for the lender, which has been hit by rising arrears as well as losses on investments related to the credit crunch.
But there is understood to be no firm interest so far despite the City watchdog's overtures, the Times newspaper reported.
Panmure Gordon banking analyst Sandy Chen said this was a "bad sign" - adding that the uncertainty could even lead to B&B customers taking their money out of the bank.
"The absence of any such bidders so far adds to the uncertainty about B&B's future, in our view.
"Our concern is that significant retail deposit outflows may occur, forcing B&B to rely even more heavily on expensive wholesale funding," he said.
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