U.K. bank eyes Amex counterpart's private-banking and transaction businesses. London-based Standard Chartered Bank has agreed to buy American Express Bank (AEB), the international banking subsidiary of New York-based American Express for about $860 million, based on a 30 June 2007 valuation.

"AEB's balance sheet is highly liquid and its income is predominantly fee- based," says Standard Chartered's CEO Peter Sands. "This is a transaction [that] has compelling strategic and financial logic and is management accretive."

Help off the ground

In addition to boosting the development of Standard Chartered's newly launched private bank by adding 140 relationship managers and about $22.5 billion in assets under management, the addition of AEB "will double Standard Chartered's U.S.-dollar clearing business," according to a Standard Charter press release. London-based AEB caters to high-net-worth clients through private-banking offices in 47 countries. It also works with financial institutions in 120 countries as a transaction settler. (The term AEB uses for its institutional business is "correspondent banking," which has a slightly different meaning in the U.S.)

With more than 1,400 branches in more than 50 countries in Asia-Pacific, the Middle East, Africa, the U.K. and the Americas, Standard Chartered has an international focus as well.

"Becoming part of a major global financial institution whose primary focus is on international banking will afford attractive expanded opportunities for our business," According to AEB's CEO Richard Holmes.

Standard Chartered figures the deal will be completed in June 2008 and that it will take about two years to intergrate AEB's operations with its own. -FWR

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