ROYAL Bank of Scotland's climbdown from a denial to a ''no comment'' stance on reports of it having had merger talks with Halifax is curious.
More and more detail about the pair's courtship continues to leak out from somewhere but the two banks seem to be keeping their cards close to their chests.
The City has its tongue hanging out in anticipation of a mega-merger in the UK's banking sector but one analyst hit the nail on the head yesterday when he said that personalities would dictate whether Halifax and Royal Bank walked down the aisle.
If, as has been said, Royal Bank chief executive George Mathewson was initially interested but then broke off discussions, a wedding may depend on two things:
Halifax's willingness to be flexible and the reception it gets from a Royal Bank chief executive not known for pandering to others' wishes.
Mathewson continues, doggedly, to deny Halifax access to Birmingham Midshires, in spite of Royal Bank having been comprehensively trumped by its Yorkshire-based rival in the bidding for the Wolverhampton building society.
A hostile bid by Halifax for Royal Bank is highly unlikely. As Bank of Scotland Governor Sir Bruce Pattullo pointed out last week, such an offer would probably have to be pitched at a prohibitive price to succeed.
And then there is the tartan card which sent any would-be predators of Bank of Scotland running for cover in 1996, when Standard Life's sale of the vast bulk of its 32.2% stake in that bank could otherwise have left it vulnerable to takeover.
It must be borne in mind that the City is desperate for a mega-merger in banking and that speculation reaches fever pitch every so often.
Royal Bank has been linked repeatedly with Midland Bank's parent, HSBC, and nothing has come of this.
Then again, the logic of a link-up between Royal Bank and Halifax is pretty convincing.
And the surge in Halifax shares provides some evidence of the weight which the City is attaching to the story.
Who knows?
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