No regrets, says Burt; BoS is ready to go hostile again

Peter Burt, the chief executive of Bank of Scotland, which this year lost out to Royal Bank of Scotland in the battle for National Westminster Bank, said yesterday he would be prepared to go hostile again if the right chance presented itself .

Mr Burt said he believed that consolidation in UK banking was by no means over, although he said there were no obvious acquisition opportunities in the UK at the moment. "I am not attracted by a mortgage bank," he said.

Speaking as the bank unveiled a 14 per cent rise in pre-tax profits to £965m in the year to the end of February, Mr Burt said he did not regret the decision to bid for NatWest.

The figures showed the bank coming under severe domestic interest margin pressure. They failed to excite the City, where Bank of Scotland shares tumbled 57.5p to 587p. Analysts were also concerned at rising bad debt provisions.

Mr Burt said the bid for NatWest had galvanised staff and boosted the image of the bank. The headlines generated resulted in Bank of Scotland winning business from corporate customers which had not known that Bank of Scotland and Royal Bank of Scotland were not the same bank.

"There will be other opportunities. What those opportunities will be, who knows? ... I'd prefer not to go hostile. But the fact that a hostile bid for NatWest succeeded - sadly not ours - is against the conventional wisdom that hostile bids for banks cannot succeed," Mr Burt said.

After the five-month bid battle for the UK clearer, Bank of Scotland has reverted to what it calls Plan A - growing organically and in partnership with other organisations that can bring access to a wider customer base.

The bank also unveiled plans to launch a UK joint venture to provide equity and mezzanine finance for small and medium-sized firms and the private equity market.

Bank of Scotland said it was talking to a UK household name about a new internet banking partnership. It is also planning to extend Eubos, its Net-based mortgage lending venture that has won £350m of business in Holland in a matter of months, to Germany. The bank is also looking Net-based sales of investment products in France.

Mr Burt agreed that his message contained little to set the pulses racing. "Banking should be boring," he said.