RBS poised for US deal

ROYAL Bank of Scotland, fresh from reporting record profits last week, is thought to be planning a takeover of Pennsylvania bank Waypoint Financial as the latest step in its American expansion.

Waypoint shares have jumped more than 10% this month as markets have tipped it as a bid target. The group, which has 65 branches in eastern states, is now valued at $865m (£450m).

American analysts are convinced that RBS is stalking Waypoint, which they say would make an excellent fit in its Rhode Island-based subsidiary, Citizen's Financial.

'I would bet heavily on RBS,' said Maryland-based bank consultant Arnold Danielson. And David Chiaverini, an analyst-with investment firm Advest, said: 'It's just a matter of what price they get taken out at.'

Waypoint's business covers a region of rapid development between Washington DC and New York State, which has been chosen by major retailers as the site for a number of major distribution centres.

'Waypoint is a nice franchise in a nice market,' Danielson said. 'RBS is weak in that market.'

RBS declined to comment. It attracted criticism from politicians and UK consumergroups last week after unveiling recordprofits of £6.2bn. These helped its shares jump 92p over the week to 1712p.

Chief executive Fred Goodwin promised rigorous value tests for any future acquisition targets.

This week will see pressure mount on Egg and its majority investor, Prudential, after RBS walked away from talks to buy the internet bank. The Pru and Egg report results this week, but neither is expected to shed further light on the auction to sell the 79% stake. Egg shares closed unchanged on the week at 167p.