HSBC is understood to have entered the $7bn (£4bn) auction to buy New York Community Bancorp, the US regional bank.
NYCB, which operates in New York and New Jersey, put itself up for sale earlier this month in an auction being run by Bear Stearns, Citigroup and specialist boutique Sandler O'Neill & Partners.
The business is made up of seven community banks operating through 141 branches and, with assets of $26.5bn, claims to be the third-largest thrift bank in the US. It is a direct rival to HSBC in New York, where the UK bank expanded through the $10bn purchase of Republic Bank four years ago.
Last year it paid $14bn for Household International, the consumer finance business based in Chicago. The business is now starting to deliver a decent return for HSBC, and Bill Aldinger, the Household chief executive who runs HSBC North America, said the group was ready to make another acquisition.
"I think it's always a question of when and what and if we have a willing seller," he said in an interview last week.
The market for US banks is hotting up following the $47bn purchase of FleetBoston by Bank of America last year and the $10.5bn purchase of Charter One by Royal Bank of Scotland last month.
NYCB would be a perfect fit for RBS, which has operations in New England, Pennsylvania and Maryland, but it is unlikely to make a move because of the Charter One deal. Barclays is also sniffing around the US regional banking market but has yet to act.
Many potential bidders have been put off NYCB because of its large securities investment business, but this could be accommodated by HSBC's investment side.