Lloyds in talks to buy Dresdner Bank

United Kingdom lender Lloyds TSB has been in talks with German insurer Allianz for weeks over the possible acquisition of Dresdner Bank, Germany's Der Spiegel magazine reported without citing sources.

It added Lloyds had already submitted a non-binding bid for Dresdner, making it the third bank to express serious interest along with Commerzbank and Spanish lender Santander.

The magazine reported Allianz was prepared to write down billions in Dresdner's assets as the bank is still valued at roughly €12 billion ($18.6bn, Dh68/78bn) in its books but Allianz probably would gain something closer to €8bn from a disposal. Neither Allianz nor Lloyds were reachable for a comment.

Britain's The Independent newspaper reported on June 16 that Lloyds is considering a bid for Deutsche Postbank, Germany's biggest retail bank, to put into action its long-held ambition to expand internationally. A deal, which could cost €12bn would be a massive undertaking for Lloyds.

The bank has looked at Germany before and had talks with Deutsche Bank earlier this decade.

Britain's biggest bank for current account customers is open to opportunities to take advantage of its relatively strong position in a sector battered by the credit crunch, the daily said.

Postbank has been up for sale since its owner, Deutsche Post, signalled last year that it was open to offers. Lloyds could find itself up against German competitors to secure Postbank. Commerzbank has said it would be open to a three-way merger with Postbank and Dresdner Bank. Commerzbank is said to be looking at Dresdner's books with a preference for buying Dresdner and launching a combined bid for Postbank.

Eric Daniels, Lloyds' chief executive, said Lloyds has room to grow in the UK during an economic slowdown and does not need an acquisition. But the group is looking for opportunities to apply its abilities in large-scale retail banking to other markets.