Standard Chartered is acquiring US-based American Express Bank for $860 million in a cash deal. But the sale does not include the primary business of Amex which is credit cards and travel-related businesses. Amex is the world’s third largest credit card network after Mastercard and Visa.
Standard Chartered is the largest foreign bank in India with 81 branches and with this acquisition, it would add the much-need branch licences for 7 branches of American Express Bank. On the other hand, its competitors, HSBC and Citibank have 47 and 39 branches, respectively, giving it a sizeable network advantage.
The merged entity in India will have assets of Rs 62,896.84 crore and will boost StanChart’s presence in the private banking space. Standard Chartered has also been laying greater focus on its Indian operations as the share of Indian operations is 12.6% in the bank’s global profits.
The deal would also help Stanchart in growing its business in India and get access to areas such as estate planning, payment processing and investment management to investors and the wealthy in India.
For American Express, it would help it in growing its chief business of credit cards and as a result is disposing off non-core businesses.
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