Standard does tango with BankBoston :: Namibia Internet Gateway cc ::

Articles: Standard does tango with BankBoston

Posted by admin on Wednesday, December 27, 2006 - 10:30 AM

Stephen Gunnion - Financial Services Editor
STANDARD Bank has cleared the final regulatory hurdle to its acquisition of the Argentinian operations of BankBoston, with Argentina’s central bank approving the purchase on Thursday.
Standard Bank expected to transfer the assets and liabilities of BankBoston Argentina on to its own balance sheet in the first quarter of next year, it said on Friday. The purchase of BankBoston Argentina is Standard Bank’s largest acquisition outside Africa to date and forms part of the bank’s ambition to grow its presence outside the continent, which was communicated to the market about 18 months ago, CE for personal and business banking Peter Wharton-Hood (pictured) said yesterday. He said the price Standard Bank had paid was subject to a confidentiality agreement. Argentina is one of a number of emerging market countries where Standard Bank aims to create a sizable presence next year. Earlier this year it said it was looking at buying up to five other emerging market banks in the next four years as it strengthens its earnings base outside SA. It also freed up global retail head Wharton-Hood to focus on the strategic development of Standard Bank’s retail and business banking businesses globally. The bank said last month it expected to complete the takeover of Nigeria’s IBTC Chartered Bank by February, which it would merge with its existing operations in that country. However, Wharton-Hood said a targeted completion date would be given to the market only once negotiations had been completed. Standard Bank already owns a small corporate and investment banking operation in Argentina. The acquisition of BankBoston will give the bank a sizable footprint in that market. BankBoston had about 740000 individual customers and 20000 corporate, commercial and small-business customers, Standard Bank said. It operates through a network of 89 branches with about 2750 staff. Standard Bank Argentina’s existing licensed operations would be integrated with those of BankBoston Argentina, it said. BankBoston chief operating and risk officer Eduardo Spangenberg would become CEO of Standard Bank Argentina, which would report to Wharton-Hood, it said. Wharton-Hood said the merged bank would rank in the top six in Argentina. “It has a substantial number of customers and significant representation in the upper and middle income segments of the market,” Wharton-Hood said. It also had a strong presence in corporate and investment banking, he said. Wharton-Hood said that following the regulatory approval, the group needed court sanction, which would take up to 60 days. Following that, the merger of the two banks would go ahead. “We would hope to complete that process by the end of March,” he said. Standard Bank would also then be able to rebrand BankBoston branches. Standard Bank’s total additional capital commitment to the merged bank would amount to $90m, taking the bank’s capital base to about $225m. Standard Bank said it would own an initial 76,7% of Standard Bank Argentina, with the balance owned by Argentinian partners the Werthein and Sielecki families, who held options to increase their shareholding to 30% over time. The Werthein family constituted one of the largest economic groupings in Argentina, with interests in insurance, communications, agribusinesses, tea packing and marketing, and other smaller ventures, Standard Bank said. The Sielecki family was a prominent Argentinian family whose main businesses were in pharmaceuticals. In recent years they had become private equity investors in various businesses, it said. Standard Bank said the acquisition of BankBoston Argentina would not have a significant effect on its financial performance in the short term. Standard Bank shares rose 1,4% to R95,88 on Friday, before closing 0,5% higher at R95.

· 94 Reads ·