JP Morgan throws down gauntlet

By DAILY MAIL REPORTER
Updated:

 

THE £33bn US bid by JP Morgan Chase for Bank One has thrown down the gauntlet to British banks trying to build a presence in America.

The deal is expected to herald a fresh bout of bids. Bank of America, previously tipped as a predator for Barclays, is taking over Fleet Boston. Speculation revived that Merrill Lynch, earlier touted as a possible partner for HSBC, is looking for mergers. Citigroup is also believed to be on the prowl.

HSBC has extensive US interests, as does Royal Bank of Scotland, which is keen to expand there.

Analysts at ABN Amro said the 'quite expensive' bid price for Bank One would deter UK banks buying in the US, despite the pound's strength. Possible UK bid targets for US banks include Abbey, Alliance & Leicester and Lloyds TSB, though the weak dollar makes the prospect less likely.

Bank One employs 300 in the UK, JP Morgan has about 10,000. No large- scale job losses are expected in Britain.

JP Morgan shares have risen more than 50% in the past year - good news for the City's Fleming clan, which acquired a large shareholding from the sale of the family business to Chase Manhattan, later swallowed by JP Morgan.

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