Germany's second-biggest bank, Commerzbank, has confirmed its interest in buying Deutsche Postbank, setting up a potential bidding battle with Deutsche Bank if Postbank is sold.
Commerzbank Chief Executive Klaus-Peter Mueller agreed that Postbank would be an attractive takeover candidate for his bank.
"As we've stressed several times, yes," he said.
Postbank's shares extended gains to trade up more than 5 percent on the news and were up 4.8 percent at 59.24 euros, making them the leading gainers on Germany's blue-chip DAX index.
Postbank, worth around 9 billion euros ($13.4 billion), is Germany's biggest retail bank, with nearly 15 million customers.
Germany's biggest lender Deutsche Bank also signaled this week that it would be interested in Postbank should Deutsche Post decide to sell it.
Deutsche Post has said it may decide on Postbank's future once the country's mail market is deregulated next year.