Standard Chartered went back on the acquisition trail yesterday with the takeover of American Express Bank for $860m (£431m) in cash.
The Asia-focused UK bank is buying the business from American Express, the US credit card company, to expand in private banking and business for financial institutions.
AEB will boost Standard Chartered's fledgling private banking business, adding 120 relationship managers, 10,000 customers and $22.5bn of assets. The UK bank launched private banking in Asia late last year to tap into the region's growing wealth. The deal will almost double its number of relationship managers and bring in long-standing clients.
The deal also gets Standard Chartered licences for seven extra branches in the restricted market of India, as well as additional outlets in Taiwan and Singapore.
Richard Meddings, Standard Chartered's finance director, said: "This transaction fits two of our key businesses. It turbo-charges our private banking business, advancing it by two to three years, and it more than doubles our financial institutions' business."
Amid the credit crunch, investors have focused on the strain that the seize-up in markets could put on banks' balance sheets. Mr Meddings said: "From Standard Chartered's perspective, we are in a world where economies are growing strongly and our businesses are performing well. We are strongly capitalised and liquid. This transaction is strategically and financially compelling."
AEB is based in New York and employs 2,300 in 47 countries, 29 of which Standard Chartered is in already. New markets include Egypt and Kazakhstan, where the UK bank has wanted to expand for some time.
The bank expects at least $100m in cost savings from combining computer systems and support functions.
Standard Chartered is based in London but makes almost all its profit in Asia, Africa and the Middle East. It has made a series of acquisitions in recent years, including in Pakistan and Taiwan last year. This year it has bought a retail brokerage in India and an aircraft-leasing company based in Ireland.Reuse content