American Express, the world’s third largest credit card network, said it would get extra payments over the next 18 months from the sale of the residuals of a banking unit, based in the Cayman Islands, to Standard Chartered, bringing the total value of the deal to $1.1bn.
American Express Bank’s private banking arm was fined $60m in August by the US authorities and accused of failing to create adequate money laundering protections. Standard Chartered said it was aware of the fine adding it would ensure the Miami-based bank complies with regulations.
AEB is present in 47 countries, serving financial institutions and high-net-worth individuals and its private banking units have $22.5bn of assets under management and 10,000 customers. The bank also provides about 1700 banks in 120 countries with clearing services in dollars, euros and yen.
Standard Chartered expects to make a double-digit return on investment from the acquisition by 2009 and to produce cost savings of $100m. Savings are expected to come from the merging of technology platforms, support functions and premises.
The UK-based bank plans to cross-sell its products to AEB’s clearing customers and to offer both banks’ products to the combined private client base.
American Express has raised $1.5bn through the sale of assets such as the tax and business services division in the past three years.
Rock unsteady
UK lender Northern Rock has seen long lines of customers outside its branches withdrawing an estimated £2bn ($4bn) in deposits amid fears of insolvency. Northern Rock’s deposits were subsequently guaranteed by theBank of England in order to stem a panic attack that could have spread to other lenders’ customers. The bank is now seen as a takeover target.
Borse Dubai has agreed to sell its stake in OMX to Nasdaq, which will take control of the Nordic exchange, in exchange for Nasdaq’s stake in the London Stock Exchange (LSE). Borse Dubai will become the biggest shareholder of the LSE with a 28% stake. The deal might find opposition from the Qatar Investment Authority, which has recently acquired a sizeable stake in the LSE and was also bidding for Nasdaq’s stake in the London exchange.
The European Commission has cleared Spain’s Banco Santander and Royal Bank of Scotland to buy assets from ABN AMRO as part of a €71bn bid for the Dutch lender. Banco Santander and Royal Bank of Scotland are bidding as part of a consortium comprising also Dutch-Belgian bank Fortis. Fortis’s planned acquisition of ABN AMRO’s remaining assets is under review by the Commission. The bank proposed selling some ABN AMRO units, including Hollandsche Bank Unie, in order to secure regulatory approval for the purchase.
German lender Deutsche Bank has placed the world’s first externally rated microcredit portfolio with private investors. The €36m portfolio was given a BBB rating by Fitch Ratings and it is part of a bigger bonds portfolio that also includes a €4m junior tranche, subscribed by Deutche Bank, and a mezzanine €20m tranche that was taken up by German development bank KfW.
International bank Citi has announced it has become the first foreign lender to obtain a merchant banking licence in Bangladesh. The licence will allow Citi to act as adviser, underwriter and lead manager in the country’s local capital markets. Bangladesh’s stock market has grown more than 60% since the beginning of the year.
Citi deal in Vietnam
Citi has entered into a partnership with Vietnam Postal Saving Service to allow clients of the state-owned postal service to make payments to firms that bank with Citi. The US-based bank plans to add 3200 new outlets to its local service network over the next 12 months .
Citi has bought Turkish brokerage house Opus Menhul Degerler. Last year, the international bank bought a 20% stake in Turkish top lender Akbank for $3.1bn. Citi plans to change the broker’s name to Citi Menkul Degerler.
China’s securities regulator has cleared two domestic brokerages, China International Capital and Citic Securities, to make direct equity investments. The move paves the way for brokerages to enter the private equity business and signals Beijing’s increasing comfort with allowing domestic institutions to restructure Chinese firms and list them on the stock exchange.
International lender HSBC has announced it aims to open 35 branches in Japan and that it will concentrate on expanding in the country without acquisitions. The bank had previously said it planned to open branches in Tokyo, Osaka and other large cities to offer wealth management services from the beginning of next year.
