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ABN Amro Bank acquires Bank of America's consumer banking business

Anurag Joshi in Bombay

ABN Amro Bank is taking over the consumer banking business of Bank of America as part of a purchase agreement covering acquisition of this line of business in India, Taiwan and Singapore.

''The consumer banking business of Bank of America to be acquired by ABN Amro bank includes consumer lending, deposit mobilisation, auto finance and mortgage activities. The acquisition is part of a US$ 200 million deal signed between the two banks for purchasing the consumer banking business by ABN-Amro Bank in these three countries,'' ABN Amro Bank CEO Ramesh Sobti said.

Sobti said that the deal involves absorption of most employees in the consumer banking division of Bank of America. ''The staff has been running the business well and it is our perception that we need this manpower for the smooth functioning of the merged portion,'' Sobti added.

The acquired business will be merged with the consumer banking division of ABN Amro Bank.

''The acquisition cost has been worked out at the net asset value (assets minus liabilities) plus a premium payment to Bank of America,'' Sobti informed. ABN-Amro will make an initial capital injection to fund the business.

The global deal will simultaneously kickstart ABN Amro's consumer banking business in Singapore, where the bank, next to its important corporate and investment banking business, currently has only a limited presence.

ABN Amro Bank also announced the joining of Bank of America's consumer banking head N Rajashekaran as the chief of its consumer banking operations.

UNI

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