Barclays will this week kick off the bank reporting season with a 15 per cent rise in profits and dividends, fuelling speculation that it will be a target for a foreign bidder.
Shares in Barclays and its rival Lloyds TSB have soared in the past six months as the City has become obsessed with the prospect of their acquisition by a US bank, with Citigroup and Bank of America leading the list of bidders.
Mergers between British banks are ruled out because of competition concerns. Lloyds TSB's shares have risen more than 40 per cent from their July low, while Barclays is up by a third - both rises comfortably ahead of others in the sector and the market as a whole.
The speculation has been fuelled by suggestions that the big US banks are looking elsewhere for their growth, having exhausted the potential for takeovers in Europe. US banking analysts from Goldman Sachs wrote recently: 'Bank of America did not have much conviction toward future acquisitions and indicated a concern that 95 per cent of revenues were from the US... acquisitions in the UK seem to be a more appealing prospect as there is clearly no language barrier, and other similarities.'
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http://observer.guardian.co.uk/business/story/0,6903,1406710,00.html
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