Standard Chartered Acquires American Express Bank

By Elvis Tah

Standard Chartered PLC has signed an agreement to acquire American Express Bank Ltd, AEB, a subsidiary of American Express Company, AXP, which is an international bank present in 47 countries in the world.

The acquisition provides an opportunity for Standard Chartered to add capability; scale and momentum to enable it fast track its banking system as well as double the size of Standard Chartered's USD clearing business and provide a direct Euro and Yen clearing capability.

As a result of the transaction, Standard Chartered's banking business will be significantly enhanced, bringing both new client relationships and new capabilities to this key customer segment.

The acquisition, which is subject to certain conditions, including regulatory consents, is to be completed in the first quarter of 2008.Standard Chartered's network will be further enhanced as a result of this acquisition, as AEB brings in valuable branch licenses from India and Taiwan.

The group will also gain access to a number of new growth markets such as Kazakhstan and Egypt where they are absent.According to the Chief Executive Officer, CEO, Standard Chartered Group, Peter Sands, "AEB's balance sheet is highly liquid and its income is predominantly fee-based." To him, the transaction has a compelling strategic and financial logic and is management accretive.

For his part, the Chairman and Chief Executive Officer of AEB, Richard W. Holmes said the transaction represents an exciting development for the customers and employees of AEB. "Becoming part of a major global financial institution whose primary focus is on international banking will afford attractive expanded opportunities for our business." Said Holmes.

He said the transaction will create significant cost and income synergy potential across business lines.As part of the transaction, Standard Chartered and AXP will include put and call options under which AXP can sell and Standard Chartered can buy American Express International Deposit Company, AEIDC, 18 months after the acquisition of AEB.

It is worth noting that Standard Chartered PLC, listed on both the London and Hong Kong Stock Exchange, ranks among the top 25 companies in the FTSE-100 by market capitalisation. The London-headquartered group has operated for over 150 years in some of the world's most dynamic markets, leading the way in Asia, Africa and the Middle East.

Its income and number of employees have more than doubled over the last five years, primarily as a result of organic growth, supplemented by acquisitions.Standard Chartered aspires to be the best international bank by being the right partner for its stakeholders.

The group now employs over 60,000 people, representing some 100 nationalities in more than 1400 branches located in over 50 countries. The bank generates more than 90 percent of its profits from Asia, Africa and Middle East, with balanced income derived from both wholesale and consumer banking.

It is committed to building a sustainable business over the long term and is trusted worldwide for upholding high standards of corporate governance, social responsibility, environmental protection and employee diversity.