Shares in Royal Bank of Scotland yesterday climbed more than 1.1% in spite of speculation among City traders that it was mulling a bid for Germany's Deutsche Postbank - suggesting that the rumours were untrue.
In accordance with the classic logic of the City, Royal Bank shares would most likely fall if it were serious about making a bid, because the cash outlay might dent short-term profit expectations.
Edinburgh-based Royal Bank declined to comment.
However, an industry observer close to the bank yesterday told The Herald: "This rumour has been around for a while, and the fact is that Royal Bank is extremely busy with its acquisition of ABN Amro, so speculation about Deutsche Postbank would be well off the mark."
Royal Bank last October led a hostile consortium - which includes Fortis, the Benelux lender and Spain's Banco Santander - in the biggest bank deal in history with the £49bn takeover of Amsterdam-based ABN Amro.
It is embroiled in the unprecedented process of carve-up and integration.
Meanwhile, Deutsche Postbank shares ended up 1.5% at e63.95, one of the biggest gainers on Frankfurt's DAX. However, it was also rumoured yesterday that Allianz, Europe's biggest insurer, could be planning to bid for Postbank.
According to reports, Postbank, Germany's biggest consumer bank by clients, has been in talks with Allianz, Deutsche Bank and ING Groep over a possible sale.
One report noted that buying Postbank would help Allianz solve problems at its Dresdner Bank unit.
The insurer may be planning to combine Dresdner's retail business with Postbank and sell the Dresdner Kleinwort investment banking division, another report claimed.
Royal Bank shares climbed 1.1%, or 4p, to 378p.
l Jan de Ruiter, ABN Amro's head of equity capital markets, is to become Netherlands' country head for Royal Bank's global banking and markets unit once the merger goes through, ABN said yesterday.
The Netherlands bank also said Tom Willett would become global head of M&A at Royal Bank. Under the reorganisation, Rutger van Nouhuys will be head of European retail and consumer banking, and Simon Hargreaves will take control of central eastern European, Middle Eastern and African M&A.
All three had been co-heads of European M&A at the Dutch bank.
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