More US bank deals mooted

19 September 2008

Struggling US mortgage lender Washington Mutual (WaMu) is likely to merge with a rival over the days to come, with talks ongoing between it and several other financial firms.

JPMorgan, Bank of America and Wells Fargo are all thought to be interested in the takeover, Bloomberg reports.

The Seattle-based savings and loan provider has been under severe strain in recent weeks, due to market concerns over its financial position.

Lehman Brothers' bankruptcy, declared late on Sunday, has exacerbated these worries - with equities indexes plunging this week on the news and causing severe erosion in investor sentiment towards financial firms.

"Banks are as cheap as they've been ever, relative to the rest of the market," Chicago-based fund manager Jack Ablin told the news agency.

"If we could get some deals done, that will add some confidence to the market."

Meanwhile, Wachovia is holding preliminary talks which could see it taken over by Morgan Stanley, Reuters reports.

An anonymous source told the news agency that the two banks were planning to merge operations - due in part to the recent downturns in both firms' stock.

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