Standard Chartered PLC (LON:STAN) saw its shares rise on Wednesday after the Financial Times reported that Barclays PLC (LON:BARC) is considering a possible merger with the rival lender.
The newspaper said Barclays' senior board members were exploring a deal with another bank and that chairman John McFarlane was keen on the idea of a possible combination with Standard Chartered.
READ: Standard Chartered reports higher profits but shares fall as income growth disappoints
The report pointed out that a private conversation had taken place between a director at each bank about the potential benefits of such a deal, but no formal or informal bid approach had taken place.
The FT added that the moves were part of wide-ranging contingency plans being considered by Barclays in response to pressure from activist investor Edward Bramson, who has become one of its biggest shareholders with a 5.4% stake.
The newspaper said Bramson may pressure the bank to slim down its underperforming corporate and investment banking division so that it can hand back capital to shareholders.
Emerging markets-focused Standard Chartered saw its first-quarter profits increase by 20% to US$1.26bn (£920m) as revenue rose to US$3.9bn, up from US$3.5bn in the last three months of 2017.
That was the bank’s best performance since 2015, when chief executive Bill Winters began a four-year turnaround plan.
In late morning trading, Standard Chartered shares were up 1.6% at 779.4p, while Barclays shed 0.8% at 209.5p.