Bank of China could acquire HBOS

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Edinburgh-based HBOS could be acquired by the Bank of China, the BBC reported.

The bank was reported to be in early talks with Jim Spowart an HBOS executive.

According to the BBC, investment company European American Capital was also involved in the counter bid to the proposed takeover by Lloyds TSB.

However, Mr Spowart would not confirm if Bank of China was indeed the backer. He told The Scotsman: "We took a decision early on to neither confirm or deny which bank was behind any potential bid."

Lloyds TSB had said that it would be able to deliver annual cost savings of over £1.5 billion by the end of 2011 if its deal was accepted.

However, Sir George Mathewson, ex-chief executive of Royal Bank of Scotland, is trying to convince shareholders they will not benefit from the Lloyds deal.

Sir Mathewson, insisted the current offer by Lloyds TSB was "no longer the best deal".