British bank Standard Chartered has acquired the international banking operations of American Express on Tuesday 18 September to boost its wealth management business. The acquisition could finally end up costing it close to $1.1 billion (Rs4,447 crore). (See: Standard Chartered to acquire American Express for $860 million)

The London-based Standard Chartered said it would pay close to $860 million (Rs3,477 crore) for the wealth management and international dollar clearing operations of American Express - known as AEB - with the option to buy its international deposit arm in 2009 for an extra $212 million (Rs857 crore).

"The deal fast tracks the development of our private bank," Standard Chartered chief executive Peter Sands said on Tuesday. AEB has a 10,000-strong private banking customer base with approximately $22.5 billion (Rs9,097 crore) in assets under management.

Standard Chartered launched private banking operations earlier this year, in Singapore, Hong Kong, Beijing, Dubai and London. The bank expects to save $100 million (Rs404 crore) in costs following the acquisition. Job cuts and employee ''redeployments'' will likely account for part of the savings.

The move may also see one of the world''s most famous credit card brands lose some of its sheen as the bank focuses on its core operations. Standard Chartered is unlikely to keep the American Express brand on board, say experts, though Sands said the topic was "under review".

The deal is a sign that American Express is no longer interested in operations outside of the credit card business, a strategy it kicked off in 2005, when it spun-off the American Express Financial Corporation as Ameriprise Financial.

An American Express representative said that core operations were a prime focus, encompassing the global payments business, the card issuing business and the merchant processing business. American Express said the $1.1 billion transaction would effectively have no real impact on earnings, but that it would free up capital associated with those units.