The bidding race for NatWest looks set for a nail-biting finish following Bank of Scotland's decision to increase its offer for the group to more than £24 billion sterling (€39.7 billion).

But analysts said the move, swiftly rejected by NatWest, was far from the knockout blow needed to guarantee Bank of Scotland victory.

NatWest owns Ulster Bank, which Bank of Scotland intends to sell. Rival bidder Royal Bank of Scotland has said it will keep Ulster.

Both bidders have until Monday to make their final offers, after which the fate of NatWest will be in the hands of its shareholders.