Deutsche Bank has resisted acquisition in the past

First-quarter profits at Credit Suisse surged sixfold and Deutsche's quarterly results were its best in three years.

The positive news produced further speculation that a possible merger could happen between the two.

The banks' heads have sought to dampen the rumour, although in the past both have alluded to making future acquisitions should profits improve.

Cashing in

Deutsche Bank's net profits were 941m euros ($1.1bn, �634m) for the period from January to March, compared with losses of 2.19m euros for the same period in 2003.

Income rose over 23% compared with last year while costs remained around the same.

For Credit Suisse, number two in the Swiss market after UBS, the figures were better still.

Net profits were 1.8bn Swiss francs, ($1.4bn, �780m) compared with 279m Swiss francs a year earlier, sending shares up 2% in early trade.

Speculation

Europe is "on the verge" of a renewed consolidation wave, said Walter Kielholz, Chairman of Credit Suisse.

"We will consider targeted acquisitions, if opportunities arise", he said.

The acquisition message was less evident from Deutsche Banks' chief executive, Josef Ackermann.

His guarded tone alluded to being on target for earnings in 2004 and he "remains confident that with continued stability and positive development in the global economy" the bank will deliver.

Previous discussions that Mr Ackermann has had about a merger have led to remarks in public that profits would need to rise first before one could be considered.

Deutsche Bank has already been seen as a target for takeover by US bank JP Morgan Chase and rumours surfaced in March that Citibank would make a bid.

There has also been much speculation about banking acquisitions in Germany.

Mr Ackermann said in February that Deutsche Bank was well placed for mergers involving German banks.