ABN Amro buys US bank for pounds 1.1bn

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The Independent Online
ABN Amro, the leading bank in the Netherlands, yesterday announced its biggest acquisition to date with a $1.9bn (pounds 1.13bn) deal to buy Standard Federal Bancorporation, one of the largest savings banks in the US Midwest.

The agreed offer represents the culmination of a series of acquisitions across the Atlantic, including three others this year, which have confirmed ABN Amro's position as the biggest foreign bank operating in the US. It comes as the group is in the process of disposing of its MeesPierson subsidiary in Holland, which analysts expect to free around 2 bn guilders of capital.

Jan Kalff, chairman of ABN's managing board, said the latest deal, to be part-financed through a local issue of $750m in preference stock, would contribute significantly to the bank's earnings per share.

It was generally welcomed by analysts, and the bank's shares closed up 4.40 guilders at 109.70 guilders (pounds 38.8) yesterday.

Standard Federal, the fourth-largest bank in the state of Michigan, employs some 4,000 staff and has 182 branches in Michigan, Ohio, Illinois and Indiana. ABN said Standard Federal's area of operations fitted well with that of LaSalle, its existing US banking subsidiary which has 130 branches in the state of Illinois.

"As with previous acquisitions, the organisational inclusion of Standard Federal in ABN Amro North America offers significant cost savings," the Dutch bank said.

No immediate job losses are expected, although studies will be undertaken to see where efficiencies can be gained, and some consolidation of back office functions and staff is expected over time.

Standard Federal's mortgage operation is the largest savings and loan lender in the US. Once combined with the LaSalle Home Mortgage Corporation, the joint operation will comprise the country's eighth-largest mortgage originator, the two sides said.

Thomas Ricketts, Standard Federal's chairman, president and chief executive, will remain as chairman of the bank and join the board of Lasalle Bank. "With this sale, we'll have immediate access to a full range of commercial products and services that would otherwise take us years to build," Mr Ricketts said.

The deal, expected to be completed in the middle of next year, will bring total assets of $15.5bn and shareholders' funds of around $900m.