Sept. 16 (Bloomberg) -- Germany's benchmark DAX Index advanced for the first day in three, as bank shares gained on optimism lenders in the country may soon merge or be taken over.

The DAX rose 9.53 points, or 0.2 percent, to 3951.28 points as of 2:45 p.m. in Frankfurt. The HDAX Index of the country's 110 biggest companies climbed 0.3 percent to 2020.71. DAX September futures dropped 1 point to 3952 points.

Shares of Deutsche Postbank AG, Germany's No. 1 bank by clients, had their biggest jump since they started trading in June after the Financial Times listed the lender among potential acquisition targets for Deutsche Bank AG.

Deutsche Bank executives have agreed to concentrate merger and acquisition activity in coming months on German retail banks, the Financial Times said, citing unidentified Deutsche executives.

The reasons behind the agreement are the decline in the bank's share price which makes international purchases difficult, pressure from ``nationalistic forces'' at the lender and the view that domestic banks best fit Deutsche's business, the FT said.

Banking stocks were among the best performers of the 18 industry groups on Germany's Prime All Share Performance Index, which tracks 377 companies listed on Deutsche Boerse AG's main Prime Standard market. The index rose 0.5 percent, outpacing a 0.3 percent advance on the broader measure.

Deutsche Postbank AG (DPB GY), Germany's biggest consumer bank by clients, added 50 cents, or 1.6 percent, to 31.10 euros.

HVB Group (HVM GY), Germany's second-largest bank by assets, added 42 cents, or 2.8 percent, to 15.20 euros.

Commerzbank AG (CBK GY), Germany's fourth-biggest bank by assets, gained 22 cents, or 1.5 percent, to 15.22 euros.

The following stocks are making gains or losses today. Stock symbols are in parentheses after the company names.

DAX stocks:

Allianz AG (ALV GY), Europe's largest insurer, added 69 cents, or 0.8 percent, to 85.42 euros. Three U.S. divisions of Allianz agreed to pay $20.6 million to settle allegations by regulators that they failed to disclose extra fees paid to brokers to sell their mutual funds.

The insurer also agreed to detail the pay of management board members, beginning with 2004 salaries, which will be made public in March.

Deutsche Lufthansa AG (LHA GY), Europe's third-largest airline, rose 6 cents, or 0.6 percent, to 9.98 euros. The company said its maintenance unit is ``on course'' to reach its goal of matching last year's operating profit and hopes to see a rebound in sales next year.

Other stocks:

Borussia Dortmund GmbH & Co. (BVB GY), fell 13 cents, or 5.4 percent, to 2.29 euros. Germany's only publicly traded soccer club, fell to a record after it announced plans to raise as much as 24.4 million euros ($29.6 million) by selling new shares.

Comdirect Bank AG (COM GY), Germany's largest online broker, added 5 cents, or 0.8 percent, to 6.35 euros. The company is in talks with American Express Co. over a possible partnership that may help it expand into credit cards, a spokesman for the broker said, confirming a magazine report.

Hypo Real Estate Group (HRX GY), a German commercial real- estate lender, rose 1.36 euros, or 5.2 percent, to 27.42 euros. The company said it sold a portfolio of mostly defaulted German loans worth 3.6 billion euros to U.S. investment firm Lone Star Funds to boost earnings.

MG Technologies AG (MGT GY), the German company that has pulled out of chemicals to focus on engineering, fell 25 cents, or 2.4 percent, to 10.37 euros after it suspended the sale of its Dynamit Nobel plastics unit after U.S. automotive supplier Flex-N- Gate Corp. failed to pay.

To contact the reporter on this story: Chris Fournier in Frankfurt at Cfournier3@bloomberg.net

Last Updated: September 16, 2004 08:47 EDT