- guardian.co.uk, Tuesday 18 September 2007 18.35 BST
Standard Chartered is paying $1.1bn (£550m) to buy American Express's banking arm, which has a customer base of institutions and wealthy individuals largely concentrated in emerging markets.
The deal will give Standard Chartered access to 10,000 private banking clients with assets of $22.5bn under management. It will give the group branch licences in India and Taiwan and take it into new territories such as Kazakhstan and Egypt.
American Express Bank (AEB) dates back to 1919 and predates the introduction of American Express credit cards. But the American financial group has decided that its future lies in payments, processing and cards.
A Standard Chartered spokesman said: "This is a very good fit with our own footprint. It's strong in Hong Kong, Singapore, Indonesia and India."
Under the terms of the deal, Standard Chartered is paying $300m plus AEB's net asset value of $860m. The transaction will be financed from Standard Chartered's cash resources and is likely to be completed in the first quarter of next year.
Standard Chartered has made a string of recent purchases to bolster its banking presence in emerging markets. It bought Taiwan's Hsinchu International Bank for £650m in September and snapped up Pakistan's Union Bank for $511m. The group has bought stakes in banking operations in Indonesia and China.
AEB's financial institutions group, which provides clearing and transaction services to other banks, employs 700 people while the private banking arm has 400 staff. The Miami-based bank has occasionally attracted the interest of regulators.
Last month, AEB agreed to forfeit $55m and pay $10m penalties in a settlement with the US Justice Department over allegations that it had failed to maintain an effective anti-money laundering program against international drug cartels. Standard Chartered's shares rose 61p to £15.30.