Standard Chartered has signed an agreement to acquire American Express Bank. The acquisition provides Standard Chartered with an opportunity to add capability, scale and momentum in two strategically important businesses, according to a statement. In the financial institutions segment, the acquisition will double the size of Standard Chartered’s US dollar clearing business and provides a direct euro and yen clearing capability. AEB will also fast-track the development of Standard Chartered Private Bank. The total cash consideration is equal to the net asset value of AEB at completion plus $300 million. As at 30 June 2007, this would have amounted to approximately $860 million. The price represents 14.3 times AEB’s annualised 2007 first-half net income and 1.5 times its net asset value as at 30 June 2007. Standard Chartered intends to finance the acquisition from internal cash resources and its ongoing debt funding programme. The acquisition, which is subject to certain conditions, including regulatory consents, is expected to be completed in the first quarter of 2008. The acquisition will provide a step change to The Standard Chartered Private Bank launched recently. AEB services over 10,000 private banking clients with total assets under management of approximately $22.5 billion and has approximately 120 relationship managers principally located in Standard Chartered’s existing footprint. Standard Chartered’s Group Chief Executive Peter Sands said: “We are delighted to welcome the employees and customers of AEB into Standard Chartered. The acquisition will add capability and scale to two of the group’s strategically important businesses. AEB’s balance sheet is highly liquid and its income is predominantly fee-based. This is a transaction which has compelling strategic and financial logic and is management accretive.” Chairman and chief executive officer of AEB, W. Richard Holmes said: "This 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.” The integration is expected to take approximately 24 months.