Shares of Washington Mutual Inc. rose 9% on Friday on speculation that the nation's largest savings and loan might be sold to HSBC Holdings, Britain's biggest bank.
The conjecture mounted after Bill Aldinger, chief executive of HSBC North America Holdings Inc., this week told British newspapers that HSBC planned more U.S. acquisitions.
A purchase of Seattle-based Washington Mutual would make HSBC about the same size as Citigroup Inc., jeopardizing the latter's title as the world's largest financial services company. Citigroup had $1.32 trillion of assets on March 31.
Like Royal Bank of Scotland, which this month agreed to pay $10.5 billion for Charter One Financial Inc., HSBC has long been expected to make a bigger push into U.S. banking.
Adding Washington Mutual -- a major presence in California with more than 700 offices -- would vault HSBC's U.S. operations to a size similar to those of Wachovia Corp. and Wells Fargo & Co., the No. 4 and No. 5 U.S. banks. With Washington Mutual, HSBC could add about 2,000 U.S. bank branches to the 452 it already has and become one of the largest U.S. mortgage lenders.
"HSBC is on the lookout to buy a U.S. savings bank to build its presence and diversify regionally, and Aldinger is pretty aggressive," said Jeff Auxier, who runs Auxier Asset Management in Lake Oswego, Ore. The firm has more than $300 million of assets and owns Washington Mutual shares.
Asked about Washington Mutual, an HSBC spokesman in London said: "We don't comment on such speculation."
Washington Mutual spokesman Alan Gulick said: "We don't comment on short-term fluctuations in our stock price."
Shares of Washington Mutual rose $3.55 to $43.20 on the New York Stock Exchange.
"For the past six months there has been no shortage of takeover speculation in banks," said Steven Sosnick, an equity risk manager with Timber Hill, a unit of Interactive Brokers Group. "The amount of volume in Washington Mutual ... tells me that the market believes something maybe is afoot."
Washington Mutual ended March with $281 billion of assets, three times as much as any other S&L. It focuses on middle-income customers, and expects this year to add 250 U.S. retail branches to the 1,776 it had at the end of 2003.
"Washington Mutual is probably frustrated it is thought of mainly as a mortgage company, not as a more diversified financial services company, which is a problem for its stock valuation as interest rates rise," Auxier said.
HSBC has operations in 79 countries and territories.