StanChart to buy Amex Bank

LONDON/NEW
DELHI: Standard Chartered on Tuesday entered into an understanding to acquire
US-based American Express Depository Financial Institution for about £431 million ($860 million) in
cash --a trade that would give the British banking major entree to additional
branch licenses in India. American Express will,
however, go on with its payment concern like recognition card and travellers'
cheque. Standard Chartered,
which according to run batted in data, is the biggest foreign depository financial institution in Republic Of India in footing of
branch presence with 81 subdivisions will derive an further seven subdivisions from
American Express. As of September 2006, StanChart accounted for a 3rd of 258
branches of 29 foreign
banks. The divestment of
banking trading operations is in keeping with the strategical focusing of American Express
Company (AEC) on the card payments, web and complemental traveling business
that are fuelling its
growth. In geographics where
the card concern is licensed through American Express Depository Financial Institution (AEB) or though
subsidiary of AEB, like in India, Republic Of Austria and Argentina, Atomic Energy Commission is in the process
of acquiring new licenses of transferring the concern to a different Atomic Energy Commission entity
to guarantee a smooth transition. American Stock Exchange have launched a figure of niche marketplace cards
in the Indian market. Sources
said, the acquisition is improbable to impact occupations in
India. Besides, American
Express also anticipates to realise an further amount representing the nett asset
value of American Express international Deposit Company (AEIDC), a subsidiary
which issues investing certifications to AEB's customer. As of June 20, 2007, the NAV
of that concern was $ 212 million. According to American Express this value is
expected to be realised through dividends from the subordinate to American
Express. AEB, whose parent AEC
is the third-largest credit card web after Visa and Mastercard, is a leading
international depository financial institution nowadays in 47 countries, including India. The acquisition,
which is subject to certain conditions, including regulating consents, is
expected to be completed in the first one-fourth of
2008. StanChart said AEB
provides it with a opportunity to add capability, scale of measurement and impulse in the
strategically of import fiscal establishments and private bank
businesses. Standard Chartered
also anticipates to deepen its existent web and spread out its entree to a select
number of new growing marketplaces through the deal. Its chief executive officer Simon Peter Littoral said, "This
is a dealing which have compelling strategical and fiscal logic and is
management accretive." The
acquisition would be accretive to Standard Chartered's net income per share in
2009 --the first full twelvemonth of ownership --and is also expected to generate
double figure investing tax return in 2009 before the allotment of integration
expenses.