Royal Bank of Scotland is in talks with Bank of America over a deal on LaSalle, the U.S. unit of ABN Amro at the heart of the battle for control of the Dutch bank, the Wall Street Journal reported.
A successful resolution to the LaSalle question could open the door to a bid for all of ABN by RBS and its consortium partners, Fortis and Santander.
LaSalle is a key asset for RBS, already the largest overseas bank in the United States, but ABN agreed to sell the unit to Bank of America last month, on the same day it agreed to be taken over by another suitor, Barclays.
RBS and its partners have said they want to trump Barclays' offer, but only if they can unpick the deal to sell LaSalle.
Some ABN shareholders have also contested the sale of LaSalle without their consent -- a move they said blocked a more lucrative takeover deal with RBS -- and the $21 billion sale has been frozen by a Dutch commercial court.
Both ABN and Bank of America have appealed against the court decision. The court plans to reach a decision by mid July.
The Wall Street Journal, citing people familiar with the situation, said on Friday that RBS and Bank of America have been talking about reaching a deal over LaSalle, possibly dividing the bank's assets.
The report -- and hints of what many analysts say would be a neat solution to a complex problem -- was enough to lift ABN shares up more than 2% in early trade.
"People believe that it is a very obvious solution," said Mark Sartori, head of sales and trading at Fox-Pitt, Kelton. "It is positive for ABN and we are seeing a relief rally in Barclays and if it is left out in the cold, it will be back in play."
Shares in ABN were up 1.7%, with Barclays also up 1.7% against a 0.6% rise in the FTSE index . RBS shares were up 0.6%.
A possible solution would be that Bank of America will buy LaSalle but RBS will get the right to buy some of LaSalle's Michigan operations, the Chicago headquarters and the LaSalle brand name, the newspaper said.
In a different scenario, Bank of America and RBS would each buy pieces of LaSalle directly from ABN, the report said.
The newspaper said that Bank of America initially rejected RBS's attempts for a settlement, but that current talks could lead to a pact if a deal benefitting both sides can be struck.
ABN and RBS declined to comment on the talks. Bank of America could not immediately be reached for comment.