French bank Credit Agricole announced today that it had decided not to launch a takeover bid for Alliance and Leicester.
Credit Agricole revealed in May that it was considering making an offer for the UK's seventh-largest bank, but said that following "further analysis" regarding the returns the company was likely to generate, it had decided not to go ahead with a bid.
"In light of this analysis, Credit Agricole has decided that it does not wish to proceed with an offer for Alliance & Leicester," the French financial institution said in a statement.
Credit Agricole, which is targeting overseas takeovers in order to increase earnings, had previously made a bid to acquire full control of the Greek lender Emporiki, prompting speculation that it would abandon its declared interest in Alliance and Leicester.
Alliance and Leicester is frequently cited as a potential takeover target due to its limited growth prospects. While boasting a network of more than 200 branches, the company is one of the UK's smaller mortgage banks.
Dismissing Credit Agricole's statement, Alliance and Leicester said that the French bank had not submitted an offer for the group and stressed that its decision would not affect its own business objectives.
"The announcements by Credit Agricole have not diverted Alliance & Leicester from our focus on delivering our strategy and we welcome the clarification today's announcement provides," said Alliance and Leicester chief executive Richard Pym.
"We continue to progress well against our strategic objectives as we become the UK's leading direct bank," he added.