Credit Agricole, France's biggest bank, could buy British bank Alliance and Leicester within weeks, the Sunday Express newspaper reported. The British weekly said that US investment bank Citigroup had been working for Credit Agricole on a six-billion-pound (11.3-billion-dollar, 8.8-billion-euro) bid.
The move is likely to speed up the process following weeks of speculation that A and L was likely to be approached by a leading European bank, the tabloid said.
A source close to the British bank told the Sunday Express: "We fully expect someone to make an approach within weeks or months.
"We can't understand why it is taking so long."
In London on Friday, A and L shares surged by 6.95 percent to 1,200 pence (22.50 dollars, 17.65 euros) after free newspaper City AM reported that Spain's Banco Santander Central Hispano was in "exclusive" takeover talks to buy its British rival.
The paper said that A and L would accept an offer of around 6.7 billion pounds. Shares in A and L earlier reached as high as 1,277 pence but pulled back slightly after brokers poured cold water on the speculation.