Is Bank of America in an acquisitive mood?

No doubt you have probably read the media speculation in recent weeks surrounding the Bank of America's expansion into Europe and Asia. The bank's CEO Ken Lewis has made no secret of the fact that he wants to expand the bank's credit card and corporate and investment banking business in Europe, and the bank is tipped to spend $500 million over the next four years doing just that. Click here for more.

Lewis has persistently denied rumours that acquiring a European bank is part of its expansion strategy. Mind you it wouldn't be the first time that a major US bank has eyed the European market only to find that the cultural and political barriers to cross-border M&A are too cumbersome to pull it off.

Nevertheless, despite the obstacles and Lewis' denials, rumours persist that a potential acquisition in Europe may be on the cards, and on 29 November at market close, Bank of America's market cap at $243.71 billion inched ahead of Citigroup's $243.52 billion.

It may have the market cap, but unlike Citigroup, Bank of America lacks a truly global footprint, despite its $3 billion acquisition of a 9% stake in China Construction bank. Lewis reportedly told The Wall Street Journal he didn't "see the strategic imperative of being on the ground in Europe." But according to an industry source I had lunch with the other day, the bank could still be eyeing a potential acquisition in Europe.

The UK banking sector is certainly ripe for consolidation with potential targets such as Barclays or Lloyds TSB. But given its associations with the Latin American market, perhaps a major Spanish bank like Banco Santander for example, would make an interesting partner for Bank of America in Europe?

In October, in an effort to strengthen its foothold in the Latin American market, Santander Central Hispano acquired private banking and premiere banking assets from Bank of America's wealth management portfolio. According to Latin Counsel.com the transaction involves the "potential transfer" of customer holdings valued at approximately $4 billion from Bank of America to Santander Private Banking. The holdings consist of accounts of residents in Latin American markets such as Mexico, Argentina, Uruguay, Chile, Brazil and Venezuela.