Banking giant HBOS has pulled out of talks to buy two Irish banks owned by National Australia Bank (NAB), the Reuters news agency has reported.
The UK's biggest mortgage lender has walked away from talks to buy Belfast-based Northern Bank and National Irish Bank in Dublin.
Reuters cited unnamed sources as saying HBOS would reopen talks if Australia's largest bank cut its asking price.
Lloyds TSB is also thought to be in the running to buy the Irish banks.
Right price
Domestic competitors Bank of Ireland and Allied Irish Bank are prevented from bidding for the banks on competition grounds.
HBOS, formed by the merger of Halifax and Bank of Scotland, was regarded as a more likely candidate as it already has a presence in Ireland and has made no secret of its desire to expand further.
NAB announced last month that it had several parties interested in the Irish banks, but vowed to hang on to them unless the price was right.
The man at the helm of NAB is Scotsman John Stewart who was credited with boosting the share price value of the Woolwich ahead of its sale to Barclays for £3.5bn in 2000.
Analysts say he is unlikely to bow to pressure to cut the price tags on the two banks.
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