American Express to Sell its Global Bank

American Express Co. announced today it will sell its international banking subsidiary to Standard Chartered PLC for about $1.1 billion to focus on its card business.

“Today’s agreement reflects our strategic focus on the high-growth, high-return payments business that have been driving our performance in recent years,” Kenneth I. Chenault, AmEx chairman and CEO, said in a statement.

AmEx said it expects to close on its sale of American Express Bank Ltd. in the first quarter of 2008, subject to regulatory approvals. The bank provides correspondent banking and full service private banking to high net worth consumers in 47 countries. The sale doesn’t include any of AmEx’s card, travel, or international financial service businesses that operate independently of the bank, AmEx announced.

The deal calls for Standard Chartered to pay AmEx the net asset value of the bank on the closing date plus $300 million. The bank was worth $860 million on June 30, AmEx reported. Standard Chartered will also pay AmEx the net asset value of American Express International Deposit Co., a subsidiary that issues investment certificates to customers. Its value was $212 million as of June 30.  Standard Chartered will buy the deposit company 18 months after the close of the sale of American Express Bank.

AmEx will take a $50 million charge in the current quarter for certain investments related to the deposit company. 

London-based Standard Chartered focuses on emerging markets and Asia. It announced the deal would give it direct access to euro and yen clearing operations, increase its dollar clearing work, and allow its expansion in India and Taiwan.