Standard pulls out of merchant bank
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Your support makes all the difference.STANDARD CHARTERED has pulled out of European merchant banking by selling its half-share in Chartered WestLB to the other shareholders for less than half what it was worth three years ago, writes Peter Rodgers.
Standard will receive pounds 26.3m - the book value of Chartered WestLB - plus a share of earnings and any assets sales over the next three years. It said the sale would free resources for investment in the Far East. The bank will keep its Asian merchant banking business, which is not part of Chartered WestLB.
In 1989 Standard received pounds 67m from Westdeutsche Landesbank and Sudwestdeutsche Landesbank when it injected its merchant banking business into a new jointly- owned company based in London.
Chartered WestLB has been profitable, making pounds 10.6m before tax last year with a similar result expected for 1992.
The low price for the remaining 50 per cent held by Standard Chartered is partly because of the poor state of the market for medium- sized merchant banks, where there is a glut of firms for sale.
The two German shareholders bought into the venture at a high premium, but now look set to win full control for a cumulative total of about pounds 100m.
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