American express is selling its international banking subsidiary American Express Bank to Standard Chartered in a deal worth about USD 1.1 billion. Standard Chartered will pay about USD 860 million in cash for the bank, and American Express said it expects to realize an additional USD 212 million through dividend payments from a subsidiary of the bank.The deal will help kick-start Standard Chartered's recently launched private banking operations and will also double the size of its dollar clearing business.
Stanchart has been growing through buyouts. Its best-known buy was of ANZ Grindlays Bank for USD 1.34 billion in 2000. In the same year it acquired chase Manhattan's card company in Hong Kong for USD 1.3 billion. In 2005 it acquired South Korea's first bank and last year it bought Hsinchu International Bank in Taiwan.
In India Stanchart already has 81 branches and will get an additional 8 branches of Amex after the buyout. However that's only if RBI approves the transfer of the licenses. In 2000, when Stanchart acquired Grindlays, it got access to that bank's Indian branch licenses. Amex is a relatively small player in India and Stachart is anyways the largest foreign bank in India.
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