Wing Hang last night said that there were no negotiations or agreements relating to intended acquisitions.

Liu Tingan, a spokesman for China Life, declined to comment on the report.

Shares of Wing Hang jumped as much as 8.9 per cent yesterday but lost some of those gains to close with a gain of 5.11 per cent at HK$111.

Other small and medium-sized lenders rose. Dah Sing Banking Group and Chong Hing Bank gained 3.31 per cent and 4.19 per cent, respectively.

Family-run lenders are believed to be the next takeover targets after Wing Lung Bank said that its controlling shareholders were in the process of selling their holdings.

David Wong Shou-yeh, the chairman of Dah Sing Financial Holdings and Dah Sing Bank, said some foreign and mainland institutions had shown interest in both of his companies.

'We are open-minded regarding mergers and acquisitions,' Mr Wong said yesterday after the annual general meeting of both companies.

However, he said there were no negotiations at the moment. The institutions interested in Dah Sing included banks and insurance companies, Mr Wong said. Some preferred simply to make equity investments, while others wanted to acquire the whole company.

Mr Wong said whether he would accept the offers, if there were any, would depend on a variety of factors, including the price and whether employees could keep their jobs.

Analysts expect that the Wing Lung deal could set a benchmark price on future acquisitions and might prompt family-owned lenders to sell. 'I think they will consider putting themselves up for sale as long as the price is attractive enough,' said an analyst.

Some media reports said that China Merchants Bank could offer as much as 3.4 times book value to acquire the controlling stake in Wing Lung.

Patrick Fung Yuk-bun, the chairman of Wing Hang, said earlier that the bank was trading at more than three times book value, indicating that the lender would not sell if the price was lower.