Outlook: Even the City is tiring of these banking bids

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YAWN, YAWN. Another 60 days to go in what is fast becoming one of the City's dullest ever takeover battles. Even the stock market is finding it hard to summon up much in the way of enthusiasm. National Westminster Bank shares barely moved yesterday after news that Royal Bank of Scotland's bid had been cleared by the Government, allowing battle proper with Bank of Scotland to commence.

The way things are going, NatWest's Sir David Rowland may, bizarrely, find himself escaping their clutches altogether. If this still seems a trifle unlikely, it is certainly true that the odds against NatWest surviving as an independent bank have shortened quite considerably in recent weeks. Nobody would have given Sir David a snowball in Hades chance when Bank of Scotland embarked on its campaign, but now the doubts are creeping in.

What's gone wrong? In part it's no more than mid-battle fatigue, and the pace will presumably pick up again with renewed vigour after Christmas, when Royal Bank of Scotland returns with a more credible offer. But there's also something more fundamental. Are these two banks really capable of delivering the pounds 1bn plus in cost cuts they promise? No one really knows, but certainly NatWest has had some success in questioning these assumptions, particularly with regard to IT spending.

Worse, the banking sector generally is being subjected afresh to new economy jitters, affecting share prices across the board. If so many traditional retailers can be prolapsed in the way they have by the threat of the Internet, for how much longer can banks defend their present, fat profit margins? Few established banks have anything approaching a credible Internet strategy, and there is every possibility of them being blown away, or at least badly injured, by the shock of the new.

In the meantime the NatWest battle grinds remorslessly on, and amid all the excitement in the technology sectors, many are beginning to wonder relevant how relevant its outcome really is.

Perhaps some mid Eighties madness might liven it up. Remember the Saatchi brothers and Midland Bank? We are at that stage of the cycle again. Come on Martin Sorrell. Awaken us from our stupor. The investment bankers could surely concoct a plausible reason for WPP to bid. Or how about you, Sir Stanley Kalms? Dixons is practically a bank already, what with all that interest free credit, and Freeserve would add Internet sparkle. Then again, perhaps not.