The Bank of China has today emerged as a potential rival for Lloyds TSB in what could turn out to be a bidding war for HBOS.
It’s reported the bank is in “early talks” with former HBOS executive Jim Spowart and investment company European American Capital over a possible counter bid to the proposed takeover by Lloyds TSB.
Lloyds TSB says it will be able to deliver annual cost savings of more than £1.5billion by the end of 2011 through its deal.
But there are fears it could lead to widespread job losses, particularly in Scotland, which would be detrimental for the financial sector and wider economy.
However the Lloyds deal is still seen by the UK government to be the most attractive option as nationalisation is something they are keen to resist. However Alex Salmond, First Minister has always maintained that HBOS should and could remain independent.
Mr Spowart refused to confirm the report that the Bank of China was the potential backer.
The report emerged as a former bank chief insisted the current offer by Lloyds TSB was “no longer the best deal”.
Sir George Mathewson, ex-chief executive of Royal Bank of Scotland, is also trying to convince shareholders they will not benefit from the Lloyds deal.