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Rumours send NatWest and Barclays higher

Tom Stevenson
Friday 17 October 1997 23:02 BST
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Another day of frantic speculation in bank stocks sent NatWest and Barclays sharply higher yesterday. Tom Stevenson, Financial Editor, reports on the rumour mill which could agree on the deals but not the names in the frame.

City gossip had both BZW and NatWest Markets on the block this weekend, with a range of buyers for both investment banks. Both parent banks treated the increasingly frenetic speculation with their usual haughty disdain but shares in Barclays closed 24p higher at pounds 16.75 and NatWest rose 36p to 972.5p on the rumours.

The most persistent story was Barclays concluding a sale of BZW to Credit Suisse First Boston, which occupies the building next to BZW's new headquarters in the Canary Wharf development in London's docklands.

One source close to the sale said: "An early sale would be highly desirable and CSFB would be a highly logical choice". Barclays would only add: "The process is continuing and proceeding as you would expect."

With BZW known to be up for sale, rather more interest was provoked by speculation that NatWest might be on the brink of announcing a sale of its NatWest Markets subsidiary. There was confusion, however, about whether ABN Amro was poised to swoop or Deutsche Morgan Grenfell. A NatWest spokesman said, predictably: "We never comment on market rumours at all."

Attention then turned to the week's reheated story that Barclays has not yet given up its ambitions to take over NatWest to dominate high street banking in Britain. Martin Taylor, the chief executive of Barclays who has come in for forceful criticism of his handling of the BZW sale, is understood to harbour a strong wish to tie up a deal that would give the combined bank an almost 50 per cent share of retail accounts, cards and small business banking.

Sentiment in NatWest was also boosted by rumours that Chip Kruger, the new chief executive of troubled NatWest Markets, was about to announce his conclusions on the way forward for the business.

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