Standard Chartered Bank's Acquisition of American Express Bank (A)

Standard Chartered Bank's Acquisition of American Express Bank (A)
Case Code: BSTR347
Case Length: 18 Pages
Period: 2007
Pub Date: 2009
Teaching Note: Not Available
Price: Rs.300
Organization: Standard Chartered Bank, American Express Bank
Industry: Banking, Financial Services
Countries: UK, USA
Themes: Mergers, Acquisitions, Strategic Alliances
Standard Chartered Bank's Acquisition of American Express Bank (A)
Abstract Case Intro 1 Case Intro 2 Excerpts


Financial Aspects of the Deal

In 2005, StanChart acquired the commercial banking business of AEB in Bangladesh for US$ 24.5 million in cash. StanChart, which had sold its private banking business in April 1996 to Swiss Bank Corporation mainly to concentrate on the Asian markets and to strengthen its trade finance business, was attracted by the fast growing number of high net worth individuals in Asia and decided to relaunch its private banking business. Asia was expected to have 2.6 million millionaires by the end of 2006...

The Benefits

StanChart expected to complete the merger integration process by September 2009. A major part of the planned integration was expected to be completed within the first 12 months of the transaction. The integration process was expected to lead to some job cuts as StanChart was reportedly of the opinion that some the AEB employees were redundant...

The Road Ahead

With the acquisition of AEB, StanChart consolidated its position in emerging economies - which was crucial for its growth in the long-term.

Goldman Sachs in its report on BRIC (Brazil, Russia, India, and China) countries said that the emerging economies would lead the world for the next 20-25 years in terms of growth. StanChart, which was making 90 percent of its profits from Asia, Africa, and the Middle East, had tremendous opportunity to grow its business rapidly...


Exhibit I: Standard Chartered Bank Share Prices on London Stock Exchange (October 2006 - September 2007)
Exhibit II: American Express Company Share Prices on NYSE (October 2006 - September 2007)
Exhibit III: Standard Chartered Bank - Consolidated Income Statement (2002-06)
Exhibit IV: Standard Chartered Bank - Consolidated Balance Sheet (2002-06)
Exhibit V: Standard Chartered Bank - Profit and Loss Account (Six Months Period Ended June 30, 2007)
Exhibit VI: Financial Profile of American Express Bank

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