Merger fever ignited the beleaguered banking sector yesterday as Deutsche Bank, Germany's largest, was believed to have turned its sights on Bankers Trust to achieve its ambition of expanding in the United States.
Deutsche, which has made no secret of its acquisition aims, is thought to have been spurned by other US financial institutions including JP Morgan, Donaldson Lufkin and Jenrette, Lehman Brothers and PaineWebber.
Speculation about such a large merger helped boost share prices for the entire banking sector, which has been battered by concerns about global economic crisis.
City sources said Bankers Trust's third-quarter trading statement, due tomorrow, would receive scrutiny for clues to merger talks. The US bank has already warned it will make a loss because of the difficult trading conditions in world markets but the merger speculation sent its share price soaring more than 8 per cent yesterday.
While a tie-up with Bankers Trust would not send Deutsche into the top echelon of investment banks in the US - its goal - sources pointed out that the halving in Bankers Trust's share price in recent weeks made it an attractive target.
