BEIJING, July 5 (Xinhuanet) -- French bank Credit Agricole said on Wednesday it would not launch a takeover bid for Alliance & Leicester (A&L), the U.K.'s seventh-biggest lender. A&L shares fell 5.8% in London, having plunged as much as 6.9% in early trading.

    Credit Agricole, France's largest retail bank, said in a statement it has decided to abandon the bid after further analyzing the returns it could generate from a takeover. Analysts had said there were no clear synergies for Credit Agricole if it bid for A&L, since the French bank does not have a large presence in Britain.

    Shares in Credit Agricole climbed 0.4% in a broadly lower French market.

    Credit Agricole said in May that it was considering a bid for Alliance & Leicester, as part of a strategy to target overseas takeovers to spur earnings growth. However, its recent decision to acquire full control of Greek lender Emporiki heightened speculation that it would eventually abandon Alliance & Leicester.

    A&L, which has a current stock market value of nearly 5 billion pounds, is one of Britain's smaller mortgage banks. It is often cited as a takeover target, along with Northern Rock and Bradford & Bingley.

    It was this year's best-performing U.K. bank stock until today as speculation of a takeover drove up the shares.

    A&L welcomed Credit Agricole's statement, saying it provided clarity, and added that the bank would focus on its own performance.

    "The announcements by Credit Agricole have not diverted Alliance & Leicester from our focus on delivering our strategy and we welcome the clarification today's announcement provides," Chief Executive Richard Pym said in a statement.Enditem

    (Agencies)