Great Britain Bank Mergers & Acquisitions (NatWest Group since 2020)

Photo: The former Royal Bank of Scotland branch at 171 Tottenham Court Road, central London. This photo was taken in 2007 during my Yorkshire and London trip. In 2010, all 311 Royal Bank of Scotland-branded branches in England and Wales were sold to Banco Santander. RBS still has an extensive network in England and Wales through its NatWest operations.    

NatWest Group plc since 2020 (formerly The Royal Bank of Scotland Group plc)

During the 17th and 18th centuries, Scotland went through a lengthy period of economic and political upheavals, heightened religious tension, and even the occasional wars with England. Back in 1698, one-quarter of Scotland’s wealth vanished when its attempt to establish the Darien trading colony in modern-day Panama failed miserably. Politically, the Act of Settlement of 1701 rescinded the House of Stuart's right to the throne of England and Scotland. Six years later, Scotland reluctantly agreed to a political union with England, creating the United Kingdom of Great Britain. The political union abolished the Scots parliament, yet gave Scotland full trade access to the English market and all her overseas colonies and trading partners.

It was during this turbulent time that the Royal Bank of Scotland (RBS) was founded in Edinburgh in 1727 by Royal Charter. It's the second joint-stock commercial bank to be founded in Scotland. The Royal Bank’s founding ended Bank of Scotland's monopoly since 1695. Right from the start, the two Scottish banks have been bitter rivals. During their early co-existence, both the Royal Bank and Bank of Scotland would hoard large quantities of the other bank’s banknotes, then they would present them for cash payment. Neither succeeded in causing a liquidity crisis at their rival, however, and both eventually accepted each other’s presence.

During the 1745 Jacobite Rising against King George II (House of Hanover), Bonnie Prince Charles’ (House of Stuart) army occupied Edinburgh and reached within 200 kms of London, putting the entire Britain into a political and constitutional crisis. However, King George’s army fought back and defeated the Jacobites in April 1746. During the occupation of Edinburgh, the Royal Bank temporarily moved its cash, precious metals and important documents to the Edinburgh Castle for safekeeping.

The Jacobite Risings alarmed the English greatly, and London quickly imposed oppressive measures to punish and quell those who supported the Stuart prince. The Scottish way of life was harshly suppressed with the banning of the tartan and the bagpipes. The clan-chiefs system was abolished and tens of thousands of people were evicted from their land. Despite all this hardship, however, southern Scotland’s industries boomed thanks to the union with England, which gave Scotland new access to a huge source of raw materials from England’s colonies, as well as the vast world market for Scottish products. Glasgow rapidly became the industrial heartland of the British Empire and its population exploded from 40,000 to 500,000 from 1780 to 1880.

In 1783, the Royal Bank opened a branch in Glasgow to serve the thriving industries. The Glasgow branch was the bank’s first outside of Edinburgh. The branch banking that people have come to be accustomed to in a modern society developed very slowly in the beginning. In the case of the Royal Bank of Scotland, a small network of branch outside of Edinburgh and Glasgow only took shape commencing in the 1830s, over 100 years following the bank’s founding. In 1864, the bank made its first ever banking acquisition when the Dundee Banking Co. was taken over.

Historically, banking in England, Scotland and Northern Ireland has always been quite separate from each other -- in other words -- English banks have very few branches and minuscule market share in Scotland and Northern Ireland, and vice versa for the Scottish and Northern Irish banks. (In terms of laws, business and banking, England and Wales are much more integrated.) This did not mean that banks from all three "countries" cannot acquire banks in each other's territories, though that usually means the much more powerful English banks buying Scottish and Northern Irish banks rather than vice versa. This historic trend would change in 2000, when the Royal Bank of Scotland swallowed the much larger National Westminster Bank.

With London’s rapid rise as the international financial centre, the bank opened an office on Bishopsgate in the City in 1874. By the time World War I broke out, Royal Bank’s network had grown to 158 branches. As a large number of male staff enlisted to the army, women began to form a meaningful percentage of the bank’s staff for the first time. The Royal Bank continued its expansion south of the Scottish border with the acquisition of London private banking firm Messrs. Drummond in 1924 and the Williams Deacon’s Bank in 1930, which had an extensive network in the northwest of England.

In 1939, RBS bought Glyn, Mills & Co. which operated exclusively in Central London. Both Williams Deacon’s Bank and Glyn, Mills & Co. continued to operate under their own brands until 1970, when the bank’s 300 branches in England and Wales were rebranded Williams & Glyn’s Bank.

During the 1950s and 1960s, RBS launched personal loans for the first time, and further expanded its branch network. It also introduced a pre-paid form of cash-dispensing machine, the forerunner of the ATM. A New York office was opened in 1960, marking the bank’s first overseas office.

In 1969, the Royal Bank of Scotland and the National Commercial Bank of Scotland amalgamated. The National and Commercial Banking Group Ltd. was created as the parent company holding the enlarged Royal Bank. In 1979, National and Commercial adopted the current name the Royal Bank of Scotland Group.

In 1972, RBS became the first British clearing bank to offer residential mortgage loans. 1973, all of the bank’s branches were linked up to its Edinburgh head office by a computer. The 1970s was a good time for the bank as the Scottish economy flourished when oil was discovered in the North Sea.

In 1980, the Royal Bank of Scotland became the subject of a bidding war between British overseas bank Standard Chartered and the Hongkong and Shanghai Banking Corp. (then of Hong Kong, now HSBC). Fears that Standard Chartered would shut down RBS’ head office in Edinburgh, or worse still, that the Scottish bank should be controlled by a bank based in a colony, aroused much opposition in Scotland. In the end, Britain's Monopolies and Mergers Commission ruled that a takeover of RBS by the Hongkong & Shanghai would not be in the interests of Scotland. The remaining bid from Standard Chartered also failed to win government approval, and RBS survived as an independent bank.

In 1985, Williams & Glyn’s Bank was fully integrated into the Royal Bank of Scotland. In the same year, the bank introduced a novel product called Direct Line to sell auto insurance over the telephone. Direct Line became an instant success.

RBS’ first foray into the American personal banking market began in 1988 when it acquired Citizens Financial of Providence, Rhode Island for USD $440-million. Back home in Scotland, 24-hour telephone banking was launched in 1994, followed by internet banking in 1997.

Recent transaction(s):

• In 2000, RBS joined the major league by taking over the much larger National Westminster Bank for GBP 21.0-billion (USD $34.0-billion).
• In 2000, Citizens Financial bought Boston-based UST Corp. for USD $1.4-billion (GBP 875-million).
• In 2001, Citizens Financial bought Mellon Bank's retail banking division for USD $2.1-billion.
• In 2002, Citizens Financial bought Medford Bancorp for USD $273-million. Medford Bank operated 19 branches and 24 ATMs in Massachusetts.
• In 2003, Citizens Financial bought Commonwealth Bancorp for USD $450-million. Norristown, Pennsylvania-based Commonwealth Bancorp (unrelated to Australia's Commonwealth Bank) operated 60 branches and 61 ATMs.
• Also in 2003, Citizens Financial bought Port Financial Corp. for USD $285-million. Port Financial was the parent of CambridgePort Bank of Boston, which had 11 branches and 15 ATMs.
• Also in 2003, RBS bought Banco Santander's German unit Santander Direkt Bank for Eur 486-million. Santander Direkt Bank offered credit cards and personal loans and had 540,000 clients in Germany. As part of the deal, RBS sold Coutts's Latin American private banking business to Banco Santander for a USD $75-million premium. Coutts is RBS' private banking division. The Latin American unit sold was based in Miami.
• Also in 2003, RBS acquired Churchill Insurance from Credit Suisse for GBP 1.1-billion (USD $1.8-billion).
• Also in 2003, RBS bought Swiss private bank Bank von Ernst from Germany's Bayerische Hypo- und Vereinsbank (later HVB Group) for GBP 228-million. Bayerische Hypo- und Vereinsbank had suffered significant losses and was in need of restoring its capital.
• In 2004, RBS’ Irish unit Ulster Bank bought Ireland's First Active for Eur 887-million (GBP 617-million). First Active specialized in mortgages and personal banking.
• In 2004, Citizens Financial bought Connecticut's People's Bank for USD $360-million.
• In 2004, Citizens Financial bought Charter One Financial for USD $10.5-billion (GBP 5.8-billion). Cleveland-based Charter One had 616 branches in the U.S. Northeast and Midwest.
• In 2005, RBS led a consortium that included Hong Kong billionaire Li Ka-Shing and Merrill Lynch to buy 10% of Bank of China for USD $3.1-billion.
• In 2006, Citizens Financial bought GreatBanc Inc. for USD $180-million. GreatBanc had 10 offices in the Chicago area.
• In 2007, RBS formed a joint-venture providing commodities trading, marketing and risk management products with Sempra Energy. RBS bought 51% of Sempra Commodities from Sempra Energy for GBP 669-million (USD $1.35-billion). Sempra Commodities was renamed RBS Sempra Commodities LLP.
• In October 2007, after a six-month battle, RBS, along with Belgium's Fortis and Spain's Banco Santander defeated Barclays in acquiring ABN AMRO Holding NV for Eur 70.0-billion (USD $101.1-billion) in cash and stock. The deal was the world's largest banking M&A. The three banks then broke up ABN AMRO's global operations amongst themselves with RBS taking over ABN AMRO's retail banking business outside of the Netherlands, Brazil and Italy, as well as its global investment banking operations. Until the break-up was completed, RBS held 38.3% of ABN AMRO, Fortis held 33.8%, Santander held 27.9%. Click here for a detailed timeline of the takeover battle for ABN AMRO.
• In 2008, in a bid to restore its severely-depleted capital, RBS sold its 50% stake in Tesco Personal Finance to partner supermarket operator Tesco plc for GBP 1-billion (USD $1.96-billion). Tesco subsequently applied for a banking licence of its own from the British Financial Services Authority.
• Following years of unrestrained credit-based spending and real estate speculation, air began to leak out of the global asset bubble in 2007, cumulating into a full-blown housing market collapse in 2008. As mortgage borrowers defaulted on their mortgages, banks around the world suffered billions of losses from bad loans and collateralized debt obligations (CDOs). When panicky institutional investors withdrew from the short-term money market, banks found themselves short of the capital needed to finance their lending activities, causing major financial institutions in the U.S., Britain, Belgium, Germany, and Iceland to fail. During an emergency summit held in Washington D.C. in October 2008, the world’s top economies pledged to bail out all major banks in financial difficulties and to provide unlimited loan guarantees for interbank lending.
• Under the partial nationalization scheme, the British Treasury promised to subscribe to a maximum of GBP 37-billion (USD $64-billion, Eur 50-billion) of new shares from RBS, HBOS and Lloyds TSB.
• In December 2008, RBS raised GBP 19.7-billion in new capital, which consisted of GBP 14.7-billion in ordinary shares (rights issue) and GBP 5-billion in preference shares with a yield of 12% p.a. As private investors refused to take up the rights issue offer, the British government ended up backstopping the issue and became holder of 60% of RBS. It was only six months earlier that RBS raised GBP 12-billion in new capital from another massive rights issue. By the time it accepted the latest government bail-out, its market capitalization had fallen below that to GBP 11-billion.
• In early 2009, RBS unloaded its 4.26% stake in Bank of China for GBP 1.6-billion (USD $2.37-billion, HKD $18.4-billion).
• On 2009-01-19, news of RBS’ GBP 28-billion (USD $41-billion) loss in 2009 sent its share prices plunging by 67% to GBP 0.16 per share. The panic selling was caused by fears that RBS would be nationalized with its shares becoming worthless. To alleviate RBS’ cash expense, the British government swapped the GBP 5-billion preferred securities that it just bought a month earlier for ordinary shares, raising the government’s holding in RBS to 70%. The swap eliminated the bank’s annual GBP 600-million dividend expense.
• During the course of 2009, RBS and the British Treasury agreed to more government bailout to limit future loan losses at the ailing bank. Under the Asset Protection Scheme (APS), RBS issued GBP 25.5-billion (USD $36.58-billion) of non-voting, convertible class “B” shares to the British government in return for state insurance against GBP 282-billion (USD $404-billion) of potential losses. RBS would bear the first GBP 60-billion of the potential losses from the loan pool; whereas any further losses from the pool would be borne 90% by the government and 10% by RBS. At RBS’ option, it could issue HM Treasury another GBP 8-billion (USD $11.5-billion) of class “B” shares in the future. RBS agreed to forfeit its ability to claim certain U.K. tax losses or allowances. With the latest re-capitalization scheme, the British government’s economic interest in RBS rose to 84.4%.
• In 2009, RBS sold its 50% stake in Spanish car insurer Linea Directa Aseguardora to its joint-venture partner Bankinter for Eur 426-million (USD $565-million).
• Also in 2009, RBS sold its operations in six Asian countries to Australia and New Zealand Banking Group (ANZ) for USD $550-million (AUD $656-million, GBP 324-million). The sale included 54 branches and about 2 million clients in Hong Kong, Singapore, Taiwan, Philippines, Vietnam and Indonesia.
• In February 2010, RBS’s commodity-trading joint-venture RBS Sempra sold its metals and energy assets outside of the U.S. to JPMorgan Chase for USD $1.74-billion (GBP 1.11-billion). RBS would receive about USD $799-million from the sale and Sempra Energy would receive USD $940-million. RBS Sempra was still looking for a buyer for its U.S.-based commodity-trading business.
• In June 2010, RBS raised GBP 137-million from three overseas disposals. First, it sold its Pakistani unit (75 branches) to Faysal Bank for GBP 34-million (USD $50-million). Then it sold its United Arab Emirates operations to the Abu Dhabi Commercial Bank for GBP 68-million (USD $100-million). Finally, it sold its Kazakhstani business (4 branches) to HSBC for GBP 35-million (USD $52-million).
• Also in June 2010, RBS sold its Indian retail banking operations to HSBC for an undisclosed amount. RBS had 1.1 million clients and 31 branches in India.
• In August 2010, RBS sold 311 RBS branches in England and Wales and 7 NatWest branches in Scotland to Banco Santander for GBP 1.65-billion (Eur 1.99-billion, USD $2.63-billion). The branch sale was part of the EU-imposed requirements for RBS to receive state aid from the British government (see update below).
• Also in August 2010, RBS sold 80% of its global payment-handling unit WorldPay to Advent and Bain Capital for GBP 1.9-billion (USD $3.0-billion).
• In January 2012, RBS sold its Dublin-based airliner-leasing firm RBS Aviation Capital to Japan's Sumitomo Mitsui Financial Group and trading conglomerate Sumitomo Corp. for USD $7.3-billion. RBS Aviation Capital owned, managed or had orders for 329 commercial jet airliners.
• In March 2012, RBS sold Coutts private bank's client accounts in Latin America, the Caribbean and Africa, as well as some of Coutt's staff in Geneva and the Cayman Islands, to the Royal Bank of Canada. The business sold had client assets of about GBP 1.5-billion (CAD $2.4-billion). Terms of the transaction were not disclosed.
• In October 2012, Santander cancelled the agreement to buy 316 British branches and 1.8-million client accounts from RBS for GBP 1.65-billion, citing operational difficulties and two years of delays.  The deal's collapse dealt a major blow to RBS' effort to meet EU's requirements for accepting state aid from the British government. RBS said it would re-start the sale process by looking for other potential buyers.
• Also in October 2012, RBS floated 34.72% of its insurance unit Direct Line for GBP 911-million.  Then in March 2013, a further 16.78% of Direct Line was sold to institutional investors for GBP 507-million (USD $756-million). As conditions to accept state aid from the British government, RBS must sell at least 50% of Direct Line by the end of 2013 and all of it by the end of 2014.
• In September 2013, RBS sold a further 20% stake of Direct Line Group for GBP 630-million. Following the sale, RBS' stake in Direct Line is down to 28.5%.
• In February 2014, RBS sold 28.2% of Direct Line for about GBP1.1-billion (USD $1.8-billion). The final 0.3% stake of Direct Line would be retained as compensation for the insurer's executive long-term incentive plan. This sale marked RBS' full divestment of auto insurer Direct Line Group.
• In September 2014, RBS floated 25% of its U.S. banking operations Citizens Financial Group for USD 3.01-billion (GBP 1.8-billion).
• In March 2015, RBS sold another 24.7% of Citizens Financial Group for USD $3.2-billion. Then in July, another 18.4% of the U.S. bank was sold for USD $2.6-billion. At the same time, Citizens Financial Group bought USD $250-million worth of its shares from RBS for cancellation.
• Also in March 2015, RBS sold its non-British private banking operations to Switzerland's Union Bancaire Privée (UBP). The sale included Coutts' and Adam & Co.'s clients in Switzerland, Monaco, UAE, Qatar, Hong Kong and Singapore, which had GBP 22.3-billion (CHF 32.0-billion) of assets under management. Terms of the sale were not announced. 
• In October 2015, RBS sold its last 20.9% stake of Citizens Financial Group for USD $2.58-billion. This sale marked the full divestment of RBS's American retail banking operations.
• In May 2018, Saudi British Bank (SABB) agreed to take over fellow Saudi Arabian-based Alawwal Bank for SAR 18.6-billion (GBP 3.68-billion, USD $4.96-billion). SABB is 40% owned by Anglo-Hong Kong bank HSBC Holdings, whereas Alawwal Bank is 40% owned by RBS Holdings NV, a consortium formed in 2007 by RBS, Banco Santander and Fortis to jointly acquire Dutch bank ABN AMRO Holding. RBS's indirect stake in Alawwal is 15%. The preliminary agreement in non-binding and subject to numerous conditions and approvals. Alawwal Bank traces its history to the 1926 Saudi Arabian (Jeddah) office of the Nederlandsche Handel-Maatschappij/ Netherlands Trading Society. In 1977, the Saudi Arabian operations of ABN AMRO (successor to the Netherlands Trading Society) were transferred to local interests with ABN AMRO retaining a 40% stake in the renamed Saudi Hollandi Bank, which in 2016 adopted the present name Alawwal Bank.
• In July 2020, The Royal Bank of Scotland Group changed its name to NatWest Group plc, taking up the English brand from which the group derives most of its revenue and profits. The group's Scottish operations would retain the RBS brand.
• In February 2021, NatWest announced that it would exit the Republic of Ireland eventually. The group's Irish operations, Ulster Bank, served 1.1-million clients through a 88-branch network with a staff of 2,800. No details of the withdrawal has been finalized yet but discussions are on-going to sell a portfolio of EUR 4.0-billion commercial loans to AIB, and its retail and small business operations to Permanent TSB. 
• In June 2021, NatWest agreed to sell EUR 4.2-billion of corporate and commercial loan book from its Ulster Bank unit to Allied Irish Banks for EUR 4.1-billion.  The sale price represents 97.63% of the par value of the loan portfolio.
• In December 2021, NatWest's Ulster Bank subsidiary agreed to sell EUR 7.56-billion of loan assets, client accounts along with 25 bank branches in the Republic of Ireland to Permanent tsb Group Holdings plc. The assets being sold included about EUR 7.0-billion of performing non-tracker residential mortgages, EUR 165-million of performing micro-SME (small, medium enterprise) loan book and EUR 400-million in the Lombard Asset Finance business. As part of the sale, Permanent tsb would pay NatWest EUR 4.8-billion in cash plus 90.9-million shares, giving NatWest a 16.66% stake in Permanent tsb Group Holdings.
• In June 2022, AIB further agreed to sell EUR 5.7-billion of performing tracker mortgages (representing 47,000 loans) to Allied Irish Banks for EUR 5.4-billion. The sale price represents 95.15% of the par value of the loan portfolio.

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Great Britain Bank Mergers & Acquisitions (NatWest Group up to 2000)

Photo: NatWest's office at the heart of the City (of London) at No. 1 Princes Street. NatWest has been a subsidiary of the Royal Bank of Scotland Group since 2000.

[Limited-coverage page] NatWest has been a subsidiary of the Royal Bank of Scotland Group since 2000. In July 2020, however, The Royal Bank of Scotland Group adopted a "new" old name NatWest Group. Events after 2000 are listed under the here.

National Westminster Bank plc (NatWest Group) 

The creation of National Westminster Bank was announced in 1968 when two of Britain's then Big Five, National Provincial Bank and Westminster Bank, agreed to merge. When the combination was completed in 1970, the resulting bank was the 5th largest in the world. In 2000, however, NatWest was taken over by the Royal Bank of Scotland Group but it continues to operate under its own identity in England and Wales.

National Provincial Bank Ltd. 

In 1833, Thomas Joplin and other investors founded the National Provincial Bank of England after five years of preparation. The bank’s mandate was to provide banking services in England and Wales outside of London, so it could issue its own banknotes. At the time, the Bank of England enjoyed a monopoly in issuing banknotes within a 65-mile perimeter of London. National Provincial did maintain a purely administrative head office in the British capital. 

From 1834 onwards, branches were opened in Gloucester, Birmingham, Boston and many other towns. By 1865, through the acquisitions of many private and joint-stock rivals, the bank already operated 122 branches across England and Wales. Soon it became clear that London was too important a market for the bank to avoid and a London branch was opened, requiring the bank to surrender its privilege to issue banknotes. 

In 1880, National Provincial restructured itself as a limited liability company and modified its name to the National Provincial Bank of England Ltd. By 1900, further expansion increased the number of branches to around 200. 

In 1917, National Provincial acquired 50% of Lloyds Bank (France) Ltd., renaming it Lloyds & National Provincial Foreign Bank Ltd. in 1919, with branches in London, France, Belgium and Switzerland. In 1918, National Provincial merged with the Union of London & Smiths Bank Ltd., which had more than 230 branches. The new bank with 700 branches adopted the cumbersome name of National Provincial & Union Bank of England Ltd. In 1920, the bank acquired London private bank Coutts & Co., which was founded in 1692 and today continues to offer wealth management services under its own brand as part of the Royal Bank of Scotland Group. 

In 1924, the bank’s name was simplified to National Provincial Bank Ltd. It continued to expand during the inter-war years and after World War II by acquiring other banks domestically. In 1954, it divested its stake in Lloyds & National Provincial Foreign Bank back to Lloyds Bank. National Provincial acquired the Isle of Man Bank Ltd. in 1961, which continues to trade under its own name today. In 1962, National Provincial took over District Bank, the seventh largest London clearing bank with a substantial branch network in Northern England and the northern Midlands counties. National Provincial kept the District Bank identity until its merger with Westminster Bank in 1970. At the time of the amalgamation, National Provincial and District Bank together had a network of about 2,200 branches. 

Westminster Bank Ltd. 

Westminster Bank can trace its roots to the London & Westminster Bank and the London & County Bank. London & Westminster was the older of the two and was officially founded in 1834 in the City. As its name suggested, the bank’s main activities focused on central London but it also acted as the City agent to various country and foreign banks. By 1905, the bank had a network of 35 branches. 

London & County Bank was created in 1836 in Southwark as the Surrey, Kent & Sussex Banking Company. Southwark was a borough in the county of Surrey at the time, but is now part of London. Just one year after its founding, the bank moved its head office to the City and in 1839, adopted the name London & County Banking Co. The bank grew rapidly during the second half of the 19th century through a series of acquisitions. By 1875, London & County had a network of 150 branches in London and Southern England, the most of any British bank. 

In 1909, London & County and London & Westminster decided to combine into the London, County & Westminster Bank. London & County’s network of more than 260 branches in London and south and east of London was merged with London & Westminster’s 37 London branches. In 1917, the bank expanded outside of southern England and acquired Belfast-based Ulster Bank, gaining 170 branches in Ireland. Ulster Bank had been weakened by the political and social upheavals gripping Ireland following the Easter Rising of 1916. In 1918, National Provincial merged with Parr’s Bank of Warrington and London (with 235 full branches) to become the London County Westminster & Parr’s Bank. The new entity now operated 700 branches. 

London County Westminster & Parr’s sensibly shortened its name to Westminster Bank in 1923. Throughout the 1920s, Westminster acquired more banks in Nottinghamshire, Yorkshire and Guernsey. By 1968, Westminster had a network of 1,400 branches across Britain, Ireland and Northern Ireland. 

National Westminster Bank Ltd. 

In 1968, National Provincial Bank (including its subsidiary District Bank) and Westminster Bank (including subsidiaries Isle of Man Bank and Ulster Bank) agreed to amalgamate into the National Westminster Bank. The new bank adopted the three arrow-heads logo, which is still in use today. When the merger was completed in 1970, the bank had 3,600 branches, though branch consolidation reduced that number to 3,200 by 1979. 

In 1972, National Westminster introduced Access, the bank’s first credit card. Throughout the 1970s, the bank actively participated in financing oil exploration in the North Sea, as well as created an international division. In 1979, National Westminster bought National Bank of North America, which had 141 branches in New York State, marking the bank’s first retail network in the United States. 

Soon after the British financial services industry was deregulated in 1986, National Westminster entered the securities business by buying up stock-brokers and underwriters. In 1988, the bank’s U.S. unit acquired New Jersey’s First Jersey National Corp. Following this purchase, National Westminster Bancorp’s network totalled 340 branches in New York and New Jersey. 

In 1991, a major restructuring programme saw the bank’s various private banking businesses combining under the Coutts & Co. brand. Coutts & Co. had been part of National Provincial Bank since 1920. Then in 1992, NatWest Markets was created to handle the group’s corporate and investment banking products. 

In 1993, the bank launched NatWest Life to embark on the life insurance business. NatWest sold its American retail bank National Westminster Bancorp to Fleet Financial in 1995 for GBP 2.3-billion (USD $3.6-billion) to focus on its British operations. In the same year, the name NatWest Group was officially adopted.

NatWest’s fortune took a dramatic turn in 1999 that eventually culminated in the loss of its independence. The events all began in September 1999 when NatWest announced a friendly deal to acquire U.K. insurer and unit trust (mutual fund) manager Legal & General plc for GBP 10.7-billion. To many analysts and institutional shareholders, however, swallowing up and integrating Legal & General was the last distraction NatWest needed when the bank’s core business was already underperforming. NatWest's share prices promptly tumbled by 26% over the next few weeks. 

Two days after NatWest's share collapse, on 1999-09-24, the Bank of Scotland launched a surprise GBP 21.0-billion (USD $34.3-billion) hostile bid to take over NatWest. 

By early October 1999, NatWest’s CEO Derek Wanless had lost the board of directors’ confidence and resigned. The bank also abandoned its offer for Legal & General. Throughout October, NatWest announced cost-cutting plans to eliminate 1,650 jobs and to sell off Ulster Bank, fund management arm Gartmore, NatWest Equity Partners and Greenwich NatWest in the hope of persuading its shareholders to vote against selling out to the Bank of Scotland. 

NatWest’s struggle to remain independent became even more complicated on 1999-11-29, when The Royal Bank of Scotland (RBS) joined the foray and announced its own hostile bid for the embattled bank. Throughout December and January (2000), both Bank of Scotland and RBS jockeyed for shareholders’ support (from both their own and those of NatWest) and raised their respective bids to over GBP 25.6-billion (USD $41.7-billion). In early February, RBS secured a GBP 500-million financing from its own institutional shareholder Spanish banking giant Banco Santander Central Hispano (now Banco Santander). With the additional cash infusion from BSCH, RBS was able to increase the cash portion of its bid for NatWest, and won over the major shareholders of NatWest. 

On 2000-02-11, NatWest finally gave up its fight and recommended its shareholders to accept the offer from RBS. By this time however, the value of the offer had fallen back to GBP 21.0-billion due to a fall in RBS share prices. What began as a seemingly ordinary takeover bid for Legal & General ended up with NatWest losing its own autonomy. 

Interestingly, both Bank of Scotland and RBS were rather smaller than NatWest. So even RBS in the end "took over" NatWest in a cash-and-share purchase, the former shareholders of NatWest actually ended up owning 62% of the newly-enlarged Royal Bank of Scotland Group, with the former RBS shareholders owning the remaining 38%. Click here to return to the Index page.

Unfortunate Victors: The Doomed Battle for ABN AMRO

Photo: Royal Bank of Scotland, Fortis and Banco Santander acquired ABN AMRO Holding for Eur 70.0-billion (USD $101.0-billion) in November 2007, marking it the largest banking acquisition in history up to that point. Ironically, barely one year following their massive acquisition, the Royal Bank of Scotland and Fortis went de facto bankrupt during the credit crisis and were nationalized by Britain (RBS) and Belgium and Luxembourg (Fortis). Meanwhile, the Dutch state bought ABN AMRO's Dutch operations from the bankrupt Fortis, returning the bank to Dutch control.

Children's Money, Adult's Battle

To the Dutch business world, 2007 was a dramatic year that saw the sale of ABN AMRO Holding NV. For several years, ABN AMRO’s management had been questioned for their mediocre management and poor profitability. Then in February 2007, British-based investment fund TCI (The Children’s Investment), holder of about 2% of ABN AMRO’s shares, openly criticized the bank’s management strategy and demanded the bank be sold or split up.

While publicly defending its long-term strategy during March, ABN AMRO held secret talks with British bank Barclays plc about a potential merger. On 2007-03-20, ABN AMRO and Barclays announced that they were in exclusive discussion about a potential combination. Speculation that a bidding war from other European and American banks would erupt lifted ABN AMRO's share prices from under Eur 30 to Eur 35 within days.

While the exclusive discussion between ABN AMRO and Barclays was still in progress, a banking consortium formed by the Royal Bank of Scotland Group (RBS), Belgium’s Fortis and Spain's Banco Santander on 2007-04-13 sent a letter to ABN AMRO’s board expressing their wish to acquire the Dutch bank. The banking consortium’s plans involved carving up ABN AMRO’s extensive global operations. RBS would take over ABN AMRO’s U.S. subsidiary LaSalle Bank, as well as ABN AMRO’s retail, commercial and investment banking businesses outside of Brazil, Italy and the Netherlands. RBS already had a sizable U.S. subsidiary named Citizens Financial. By acquiring Chicago-based LaSalle Bank, RBS could achieve greater synergy and efficiency in the U.S.

Meanwhile, Fortis planned to take over ABN AMRO’s home market in the Netherlands, as well as its global private banking and asset management divisions. Lastly, Banco Santander, which already operated extensively in Latin America, would take over ABN AMRO’s Brazilian operations Banco ABN AMRO Real, and expand into the high-growth Italian market by acquiring ABN AMRO’s Banca Antonveneta. With much more overlap in their existing markets, the tri-bank consortium could achieve much more cost savings and afford a higher price for ABN AMRO than Barclays.

The Dutch Central Bank, De Nederlandsche Bank (DNB), favouring a merger of equals between Barclays and ABN AMRO over the consortium’s break-up proposal, warned on 2007-04-18 of the risks and complications in “the preparation… the execution and implementation” of the [consortium’s] proposal. His comments, however, were immediately criticized by the European Commission that nationalist protectionism must not be used to discourage cross-border consolidation within the EU.

Barclays-ABN AMRO's Poison Pill

After a month of exclusive talks, Barclays and ABN AMRO jointly-announced on 2007-04-23 that they had agreed to an all-stock deal that valued ABN AMRO at Eur 67.0-billion (GBP 45.4-billion, USD $91.0-billion), making it the biggest banking merger ever. At the same time, ABN AMRO also announced that it had agreed to sell its U.S. operations LaSalle Bank (officially known as ABN AMRO North America Holding Co.) to Bank of America for USD $21.0-billion (Eur 15.46-billion) in cash. ABN AMRO’s surprise announcement to pre-emptively sell LaSalle Bank was clearly a “poison-pill” move to fend off the breakup proposal from RBS, Fortis and Santander. Without LaSalle Bank, the division most sought after by RBS, it was believed that consortium might disband itself.

Under the Barclays-ABN AMRO merger proposal, the new bank would retain the name Barclays plc, and have its head office in Amsterdam. Existing Barclays shareholders would end up owning 52% of the new bank, while the remaining 48% would be owned by the former ABN AMRO shareholders. About 12,800 jobs would be cut from the combined operations. Consolidation cost savings would amount to Eur 3.5-billion annually.

Furious Consortium Counter-offers

Understandably, RBS, Fortis and Santander were furious about ABN AMRO’s agreement to sell LaSalle Bank to Bank of America for USD $21.0-billion. British investment fund TCI and Dutch investor rights group VEB both demanded that the terms of the LaSalle Bank sale be made public, and a shareholders’ meeting be called to vote on the sale.

Barely two days following the Barclays offer, RBS, Fortis and Santander made an unsolicited, informal offer of Eur 72.2-billion (USD $98.5-billion) for ABN AMRO, triggering a dramatic takeover battle. The consortium’s offer consisted of 70% in cash and 30% in stock. However, the offer was conditional on ABN AMRO rescinding its agreement to sell LaSalle Bank. Analysts generally favoured the consortium’s offer, as it was higher than the one proposed by Barclays, and had a high cash component as opposed to Barclays’ all-stock offer, whose value had fallen to Eur 65.0-billion (USD $88.2-billion) due to a drop in Barclays’ share prices. When ABN AMRO’s management refused to let its shareholders vote on the sale of LaSalle Bank, shareholder rights group VEB launched a lawsuit against the Dutch bank.

Throughout April and May 2007, the market wildly speculated that HSBC, BNP Paribas, BBVA and JPMorgan Chase could also bid for ABN AMRO. There were also rumours that Société Générale and UniCredit were in merger talks with each other.

ABN AMRO’s uncertain future prompted some clients to pull their savings from the bank and others to express concerns. ABN AMRO’s employees and labour unions accused the shareholders of selling out one of Netherlands’ most important businesses, and urged the shareholders to put the future of Dutch jobs and the Dutch economy ahead of greed.

Meanwhile, Bank of America, eager to acquire LaSalle Bank from ABN AMRO, signalled that it would sue ABN AMRO should the LaSalle Bank sale agreement be rescinded, potentially triggering a lengthy and nasty legal battle across the Atlantic.

While all the parties waited for the Enterprise Chamber of the Amsterdam Court of Appeal’s ruling on the VEB lawsuit, ABN AMRO openly questioned how the consortium could come up with more than Eur 50.0-billion in cash to pay for the offer.

The Trans-Atlantic Lawsuits

On 2007-05-03, the Enterprise Chamber of the Amsterdam Court of Appeal ruled that ABN AMRO’s sale of LaSalle Bank to Bank of America was illegal, and that ABN AMRO must obtain shareholders’ approval before the sale could proceed. Within 24 hours of the Dutch court’s ruling, Bank of America filed a lawsuit in the U.S. District Court in Manhattan demanding ABN AMRO to go ahead with the sale.

At the same time, Dutch finance minister Wouter Wos also waded into the takeover drama by urging the RBS-Fortis-Santander consortium to clarify on their financing and breakup implementation plans.

Not backing down from the legal setback, Barclays and ABN AMRO filed an appeal on 2007-05-15 to the Dutch Supreme Court over the ruling that froze the sale of LaSalle Bank to Bank of America. Then two weeks later, RBS, Fortis and Santander officially presented their hostile Eur 71.1-billion offer for ABN AMRO.

The takeover battle went through a month of relative calm until 2007-06-25, when the most senior advisor to the Dutch Supreme Court, Attorney General Levinius Timmerman concluded that ABN AMRO’s sale of LaSalle Bank to Bank of America was legal, and should not be blocked. The Attorney General’s legal opinions, while not binding, have historically been highly regarded by the Supreme Court.

Barclays-ABN AMRO: 1 Consortium: 0

On 2007-07-13, as expected, the Dutch Supreme Court cleared ABN’s sale of LaSalle Bank to Bank of America. Analysts began to wonder if the setback would cause RBS to pull out of the consortium. By now, however, a further drop in Barclays’ share prices meant that its offer has fallen in value to Eur 63.7-billion (USD $87.6-billion).

Despite the failure to secure LaSalle Bank, the RBS-Fortis-Santander consortium not only pressed on with the offer, but on 2007-07-16 raised the cash component of their offer from 70% to 93.5%, with the rest payable in Royal Bank of Scotland shares. This meant that the consortium now needed to come up with Eur 65.7-billion (USD $90.4-billion) in cash to buy ABN AMRO.

Barclays Gets Hot Money from Asia

Barclays, refusing to back down from the battle, also worked behind the scene to look for ways to raise its offer. Exactly one week after the consortium raised their cash portion of the offer, Barclays raised GBP 2.44-billion (Eur 3.6-billion, USD $4.97-billion) in cash by issuing a 3.1% stake to China Development Bank and a 2.0% stake to Singapore’s sovereign fund Temasek Holdings. Barclays would use the proceeds to buy back its own shares to support its share price. Should the bid for ABN AMRO succeed, China Development Bank had committed to invest another GBP 3.64-billion worth of Barclays shares, whereas Temasek had committed to invest another GBP 499-million worth of Barclays shares.

Armed with this freshly-injected GBP 2.44-billion cash, Barclays raised its offer for ABN AMRO to Eur 67.5-billion (USD $93.1-billion) and added a cash component to it: the new offer was 37% in cash and 63% in Barclays’ shares. Barclays’ new offer was still 5% below that from the tri-bank consortium, but the bank was betting that its share buyback programme would prompt investors to bid up its share prices. It was also hoping that ABN AMRO’s shareholders might favour the friendly merger deal over the uncertainties surrounding the consortium’s offer.
However, Barclays’ new offer failed to ignite investor enthusiasm and the value of its offer continued to linger around Eur 66.0-billion rather than catch up to the consortium’s Eur 72.0-billion.

Consortium Seeks Eur 65.7-Billion, in Cash

In late July, there were doubts over whether Fortis, the smallest member in the consortium, could raise the Eur 24.0-billion from investors to finance its share of the ABN AMRO purchase. For much of late July and August, ABN AMRO shares traded between Barclays’ offer price and the consortium’s offer price, suggesting uncertainties over the outcome of the battle. However, Fortis, RBS (Eur 22-billion) and Santander (Eur 19.8-billion) all successfully raised the cash required to pay for ABN AMRO.

Barclays, meanwhile, was understood to be taking a wait-and-see stance, as it was convinced that the Dutch central bank and the EU anti-trust authorities would place tough conditions on Fortis’ plan to take over ABN AMRO’s Dutch operations.

Tremors from the U.S.

The takeover battle for ABN AMRO took another unexpected twist in August, when the credit crisis suddenly caused banks around the world to tighten lending activities. The formerly red-hot U.S. housing market, which had been in a slump since late 2006, began to cause massive loan losses in the global banking sector throughout the summer of 2007. Corporate bond prices slumped and trading of higher-risk mortgage loans, often packaged and re-sold to investors as collateralized debt obligations (CDOs), came to an abrupt halt when mortgage default rates soared. As many companies around the world had invested their short-term cash in these CDOs, the seize-up of CDO market caused a sudden shortage of cash. The resulting liquidity crisis led stock markets around the world to tumble. At one point, there were fears that both Barclays and the consortium would withdraw its offer for ABN AMRO due to their high exposure to the alternative investment market.

During the first wave of the credit market crunch in late-August, the value of Barclays’ mostly-stock offer fell sharply to Eur 58.4-billion (USD $79.3-billion, GBP 40.0-billion), essentially wiping out all the gain made by the cash injection from China Development Bank and Temasek. Despite a significant fall in RBS’ and Fortis’ share prices also, the value of the RBS-Fortis-Santander offer remained relatively steady at around Eur 70.6-billion (USD $96.5-billion) due to its high cash element. Nevertheless, several of RBS’ institutional shareholders in September 2007 were believed to have urged the bank to activate the “material adverse event” clause to reduce or even cancel the offer for ABN AMRO.

Cash is King. Barclays Loses the Battle But Wins Eur 200-million

Meanwhile, Barclays’ hope that Fortis would face anti-trust challenges in the Netherlands was dashed on 2007-10-03, when the European Commission cleared RBS-Fortis-Santander’s acquisition of ABN AMRO. One day after that, only 0.28% of the outstanding ABN shares were tendered to Barclays and the British bank conceded defeat. In accordance with the friendly merger agreement, ABN AMRO paid Barclays a Eur 200-million breakup fee. Meanwhile, the RBS-Fortis-Santander consortium received more than 86% of ABN AMRO’s shares and made its offer unconditional. The consortium's higher and almost all-cash offer clearly won over the hearts of ABN AMRO’s shareholders at uncertain times. At closing, the consortium’s offer was worth about Eur 70.0-billion (USD $101.0-billion).

Two of the Three Victors Became Big Losers

Even though RBS, Fortis and Banco Santander appeared to be the victors, against all odds, in the takeover battle for ABN AMRO, it soon became apparent that their acquisition could not have been executed at a worse time.

Throughout 2008 and 2009, the global real estate bubble burst and the CDO market collapsed. Recklessly careless lending by banks and carefree borrowing from consumers since 2000 together contributed to a massive housing and credit bubble in the United States, Great Britain, Spain, Ireland, Iceland and Eastern Europe. A huge amount of these consumer loans was re-packaged into “innovative” investment products that were off-balance-sheet, meaning that the loans were not subject to regulatory capital requirements.

When the bubble burst in 2007 and 2008, the impact was so severe that many of the world’s largest financial institutions including Citigroup, Bank of America, Wachovia, Merrill Lynch, Morgan Stanley, HBOS, Royal Bank of Scotland, Fortis and UBS certainly would have gone bankrupt were it not a concerted effort by governments around the world to inject much-needed capital into the banks, and to unconditionally guarantee their loan losses and customer deposits.
Shockingly, less than one year following their triumphant purchase of ABN AMRO, both the Royal Bank of Scotland and Fortis were de facto bankrupt in September 2008. At this point the Dutch state decided to buy ABN AMRO's Dutch operations from the bankrupt Fortis, which ironically, returned ABN AMRO to Dutch control. The Royal Bank of Scotland only survived because the British government nationalized the bank by injecting billions of pounds of new capital, as well as insuring hundreds of billions of sour loans against losses. Similarly, Fortis was nationalized by the Belgian and Luxembourg states. Fortis' Belgian operations were then taken over by BNP Paribas. Both RBS’ and Fortis’ shareholders lost almost 100% of their investment.

The Shrewd Santander

Banco Santander, on the other hand, came out of the ABN AMRO drama as a true and respected winner. In fact, just when the whole ABN AMRO deal was being closed, Santander surprised the market by selling Banca Antonveneta, ABN AMRO's Italian division that it had just acquired days earlier, to Banca Monte dei Paschi di Siena for Eur 9.0-billion (USD $13.21-billion) in cash. This meant that Santander only paid about Eur 9.8-billion for Banco ABN AMRO Real of Brazil, which was considered to be a bargain.

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Netherlands Bank Mergers & Acquisitions (ABN AMRO Holding)

Photo: Banks are perhaps some of biggest spenders in marketing. Shown here is a pair of Team ABN AMRO cuff-links in the around-the-world Volvo Ocean Race 2005-2006.

In late 2007, ABN AMRO Holding was taken over by a consortium formed by the Royal Bank of Scotland, Belgium's Fortis S.A./NV and Spain's Banco Santander. Subsequently, both the Royal Bank of Scotland and Fortis became de facto insolvent. The Dutch operations of Fortis and ABN AMRO were nationalized by the Dutch state in October 2008.

ABN AMRO Holding NV

Algemene Bank Nederland (ABN)
Thanks to their strategic locations on the coast of the North Sea, Amsterdam and Rotterdam have functioned as major trading, transportation and financial centres since the 1600s. To further strengthen their role in trade and finance, King William I of the Netherlands signed a Royal Decree in 1824 establishing the Nederlandsche Handel-Maatschappij (NHM, or Netherlands Trading Society) in Amsterdam. Gradually, the Nederlandsche Handel-Maatschappij turned its attention to trade financing. 

By the late 1920s, NHM had established offices across the world, including in multiple posts in present-day Indonesia, and in Singapore, Malaysia, Japan, Hong Kong, China, Myanmar (Burma), India, Suriname and Saudi Arabia. In October 1964, it merged with De Twentsche Bank to become the Algemene Bank Nederland (ABN), which is Dutch for "General Bank Netherlands".

Interestingly, some of NHM's former offices grew into rather sizeable operations. For example, NHM's Jeddah office (founded in 1926) became a Saudi Arabian bank. In 1977, to comply with a new legislation requiring all foreign banks to cede majority control of their local subsidiaries to Saudi Arabian interests, ABN Saudi Arabia (successor to the NHM) was  renamed Saudi Hollandi Bank, with ABN AMRO retaining a 40% stake until ABN AMRO itself was taken over and broken up by RBS, Banco Santander and Fortis.


Amsterdam-Rotterdam Bank (AMRO Bank)
Amsterdam and Rotterdam have been rivals in winning trade and finance since the medieval times. In 1863, the business leaders in Rotterdam set up the Rotterdamsche Bank, which was modelled after British colonial banks like the Mercantile Bank and the Chartered Bank. Initially, Rotterdamsche Bank specialized in providing loans to companies operating in the Dutch East Indies (present-day Indonesia, then a Dutch colony). Subsequently, the bank decided to expand its operations at home in the Dutch market. Early in the 20th century, Rotterdamsche Bank changed its name to Rotterdamsche Bankvereeniging, or Robaver for short. In 1964, Robaver merged with Amsterdamsche Bank, which was founded in 1871 to focus on the Dutch and German money markets. The new bank was known as the Amsterdam-Rotterdam Bank, or AMRO Bank for short.

Recent transaction(s):

• In 1990, ABN and AMRO Bank announced a friendly merger to create ABN AMRO Holding NV.
• In 1996, ABN AMRO bought Standard Federal Bancorp for USD $1.9-billion. Standard Federal was based in Troy, Michigan.
• In 1998, ABN AMRO bought Brazil's 4th largest bank Banco Real for USD $2.1-billion to form Banco ABN AMRO Real.
• In 2001, ABN AMRO's U.S. division LaSalle Bank bought Michigan National Bank from National Australia for USD $2.75-billion.
• In 2003, ABN AMRO’s Brazilian division Banco ABN AMRO Real bought Banco Sudameris from Italy's Banca Intesa for Eur 648-million.
• In 2005, ABN AMRO offered to buy the 87.3% of Italy's Banca Antonveneta that it did not already own for Eur 6.30-billion (USD $8.10-billion). Following ABN AMRO's announcement, Banca Popolare Italiana (formerly Banca Popolare di Lodi) launched its own but lower offer for Banca Antonveneta. Subsequently, it was discovered that Banca d'Italia's (Italy's central bank) governor Antonio Fazio had secretly pushed for a "made-in-Italy" merger between Popolare Italiana and Antonveneta over the higher offer from ABN AMRO. The scandal resulted in Mr. Fazio’s resignation and the suspension of Popolare Italiana's senior executives. In late 2005, ABN AMRO was given the final approval to take over Banca Antonveneta in a deal that valued the Italian bank at Eur 8.12-billion (USD $9.80-billion). The takeover of Antonveneta was the first time a major Italian bank had been acquired by a foreign bank.
• In 2007, ABN bought 93.4% of Pakistan's Prime Bank for PKR 13.8-billion (Eur 172-million). ABN also launched a tender offer for the remaining 6.6% shares in the open market. Prime Bank operated 69 branches in 25 Pakistani cities. The bank had Eur 654-million in assets and Eur 515-million in deposits.
• In April 2007, ABN AMRO and Britain’s Barclays plc agreed to a friendly merger. ABN AMRO had been under shareholder pressure for its under-performing profitability for several years. Barclays’ initial all-stock offer valued ABN at Eur 67.0-billion. Meanwhile, the Royal Bank of Scotland (RBS), Belgium’s Fortis and Spain’s Banco Santander were also preparing for a competing bid to buy out and carve up ABN AMRO Holding amongst themselves. Hoping to thwart the hostile offer from RBS-Fortis-Santander, ABN AMRO agreed to sell ABN AMRO North America Holding Co. (LaSalle Bank Corp.) to Bank of America for USD $21-billion in cash. RBS had wanted to combine its U.S. division Citizens Financial with ABN AMRO's LaSalle Bank. In pre-emptively selling LaSalle Bank to Bank of America, ABN AMRO was hoping to make itself unattractive to the Scottish-Belgian-Spanish consortium and foil the "break up ABN AMRO" proposal.
• In 2007, amidst the battle for ABN AMRO Holding, the Dutch bank agreed to accept TWD 6.90-billion (USD $209-million) from the Taiwan government to takeover the operations of the bankrupt Taitung Business Bank. Taitung Business Bank had been under state administration due to its overwhelming non-performing loan portfolio. Under the agreement, the Taiwan government would pay TWD $6.90-billion to ABN to take over Taitung Business Bank's assets, liabilities and 32 branches. ABN AMRO already operated five branches in Taiwan.
• In late 2007, ABN AMRO Holding lost its autonomy when its shareholders accepted a Eur 70.0-billion (USD $101.1-billion) buyout from the Royal Bank of Scotland (with a 38.3% stake), Fortis (33.8%) and Banco Santander (27.9%). The tri-bank consortium would break up ABN AMRO's various global operations amongst themselves in two years. Click here for a detailed timeline of the Battle for the Control of ABN AMRO.
• During the second half of 2008, the RBS and Fortis were caught up in the Global Banking Meltdown. As financial institutions failed around the world from massive loan losses incurred from the U.S. real estate collapse, banks became unwilling to lend to each other, resulting in a sharp rise in the Libor rates (London Inter-bank Borrowing Rates). Banks that had over-extended themselves, including RBS and Fortis, became insolvent as their funding source dried up.
• On 2008-09-29, the Belgian, Dutch and Luxembourg governments jointly rescued Fortis by providing Eur 11.2-billion (USD $16.2-billion) of emergency funding. The Belgian state agreed to buy 49% of Fortis' Belgian banking unit, Fortis Bank S.A./NV for Eur 4.7-billion (USD $6.79-billion); the Dutch state agreed to buy 49% of the Dutch bank unit, Fortis Bank Nederland Holding, for Eur 4.0-billion (USD $5.78-billion); whereas Luxembourg agreed to buy Eur 2.5-billion (USD $3.61-billion) of bonds convertible into 49% of the local unit Fortis Banque Luxembourg. Fortis was also expected to auction off the ABN AMRO businesses that it had just paid Eur 24-billion for in 2007. However, the most likely buyer, ING Groep, had announced that it was not interested in bidding for ABN AMRO’s global operations.
• However, the massive cash injection from Belgium, the Netherlands and Luxembourg failed to quell widespread fears over Fortis’ survival, and clients were said to be transferring their deposits to other banks. On Friday 2008-10-03, the Dutch government made a surprise announcement that it had agreed to nationalize the entire Dutch operations of Fortis S.A./NV for Eur 16.8-billion (USD $23.2-billion). The units bought by the Dutch government included all of Fortis Bank Nederland (Holding) NV, Fortis’ interests in ABN AMRO, insurer Fortis Verzekeringen Nederland NV, and Fortis Corporate Insurance NV. The Dutch government’s deal to buy all of Fortis’ Dutch banking and insurance operations replaced the deal to buy 49% of Fortis Bank Nederland for Eur 4.0-billion (USD $5.78-billion) announced just a week earlier.
• Even though Fortis’s Dutch operations were not believed to be badly in distress, the Belgian-based parent Fortis S.A./NV had been teetering on the brink of collapse. The Dutch government said in a statement that the nationalization of Fortis Nederland and ABN AMRO was needed to stabilize the panicky Dutch monetary system. The deal gave the Dutch government the entire control of the bancassurance operations, which would make it much easier to sell than had the government only acquired a minority stake. The deal also allowed Belgian-based Fortis to receive badly-needed capital.
• The Dutch government planned to merge ABN AMRO and Fortis Bank Nederland into a new entity and privatize it in 2011 or later.
• In November 2015, the Dutch government floated 20% of ABN AMRO on the Amsterdam stock exchange and raised EUR 3.34-billion, valuing the bank at EUR 16.7-billion. The Dutch state expected to take several years to unload all of ABN AMRO back to private shareholders.
• During the summer of 2016, Swedish bank Nordea approached the Dutch government to acquire the majority-state-owned ABN AMRO, but the Dutch government was not interested in selling its stake. At the time, ABN AMRO had a market value of over EUR 17.0-billion.
• In December 2016, ABN AMRO sold its private-banking business in Asia and the Middle East to Liechtenstein-based LGT Group. Terms of the sale were not disclosed. The unit managed USD $20-billion in Singapore, Hong Kong and Dubai. LGT is owned by Princely House of Liechtenstein and the purchase would increase its assets under management to more than USD $40-billion in Asia, and $160-billion globally.

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Great Britain / Hong Kong Bank Mergers & Acquisitions (HSBC Holdings)

Photo: Even though HSBC is now technically a British bank, its single largest and most profitable market continues to be Hong Kong.  This is The Hongkong and Shanghai Banking Corp.'s (HSBC's Asian unit) headquarters at No. 1, Queen's Road, Hong Kong. As of February 2010, the bank's CEO office would also be re-located to Hong Kong, but subsequent ambiguous clarifications suggested that the CEO would spend much of his time in London, and would continue to pay UK tax.


HSBC Holdings plc (滙豐控股)


The Hongkong and Shanghai Banking Corporation

The Hongkong and Shanghai Banking Corporation was established by a Scotsman named Thomas Sutherland in Hong Kong in 1865. He was then working for the Peninsula and Oriental Steam Navigation Co.'s (P&O) Hong Kong office. Riding on the growing trade between Europe, India and China, The Hongkong & Shanghai blossomed from trade financing. It began operation in March 1865 in the then British Crown Colony of Hong Kong and within a month, opened a branch in Shanghai in Imperial China. Almost right from its founding, The Hongkong & Shanghai gained the privilege to issue Hong Kong's banknotes, which it still does today even after Hong Kong was returned to China in 1997.

With its well-recognized British banking expertise, The Hongkong & Shanghai soon became a principal bank in the Far East. In 1866, the bank opened a branch in Japan and acted as advisor to Japan's banking and currency policy. In 1874, the bank was appointed as the sole fiscal agent to Imperial China. During much of the early 20th century, the bank underwrote most of China's public debt issue. In 1888, the bank became the first modern bank in Thailand, and printed that country's first banknotes.

Hong Kong fell to the invading Japanese army on Christmas Day, 1941, and the bank's operations ceased. As much of Asia soon became occupided by the Japanese army, the bank shut down almost all of its branches and the head office was moved to London in 1943. During the brutal occupation, the bank's general manager and his designated successor both died in war camp in Hong Kong as prisoners of war. Following the end of World War II, the head office powers and functions quickly returned to Hong Kong in 1945.

Ironically, soon after the "liberation" of China by the Communists in 1949, all foreign banks, including The Hongkong & Shanghai, were evicted and banned from China until the 1980's, when the communist country again opened its doors to foreign tourists and investment.

In 1959, The Hongkong & Shanghai acquired the Mercantile Bank of India (a fellow British colonial bank established in 1853 in Bombay/Mumbai) as well as the British Bank of the Middle East. The British Bank of the Middle East traces its history to the 1889 establishment of the Imperial Bank of Persia. The bank changed its name to the Imperial Bank of Iran in 1935, then the British Bank of Iran and the Middle East in 1949. In 1952, the bank's operations in Iran was wound up and the bank's remaining Middle Eastern operations became the British Bank of the Middle East. 

In 1965, following a local Hong Kong economic crisis, it bought a controlling stake in Hang Seng Bank (established in 1933). Hang Seng is Hong Kong's largest local bank and is most well known for its Hang Seng Index, the benchmark index of the Hong Kong stock exchange.

In 1977, a new legislation in Saudi Arabia required all foreign banks to cede majority control their Saudi Arabian subsidiaries to local interests. To comply with this law, the British Bank of the Middle East's Saudi Arabian operations were transferred to a local company named Saudi British Bank (SABB), and The Hongkong & Shanghai's stake fell to 40%. Despite that, The Hongkong & Shanghai remained SABB's largest single shareholder, and SABB continued to use the Hong Kong bank's logo and branding.

The Hongkong & Shanghai was keen to expand outside of Asia, and in 1980, bought 51% of Marine Midland Banks, Inc. of Buffalo, New York, for USD $314-million (no relation to Britain's Midland Bank up to that point). The remaining 49% of Marine Midland was eventually bought up in 1987 for USD $800-million (HKD $6.24-billion).

Then in April 1981, anxious to create a platform for its European expansion, The Hongkong & Shanghai (by then often known simply as Hongkong Bank) launched a hostile bid for The Royal Bank of Scotland (RBS) valued at GBP 498-million. RBS had just a month earlier accepted a friendly GBP 334-million offer from Standard Chartered Bank. For several months, Standard Chartered and Hongkong Bank engaged in a bidding and publicity war for RBS. However, the British Monopolies and Mergers Commission ruled that it was not in the interests of Scotland to lose control of one of its biggest banks to foreign hands. Consequently Hongkong Bank withdrew its takeover offer for The Royal Bank of Scotland. Interestingly, Standard Chartered in the end also failed to win approval for the Scottish bank. No one involved at the time would foresee that Hongkong Bank would come back between 1987 and 1992 to acquire the much bigger Midland Bank; whereas RBS itself would turn into a predator in taking over National Westminster Bank in 2000.

Midland Bank plc

Midland Bank can trace its history back to 1836, when the Birmingham and Midland Bank was founded in Birmingham. In 1891, Birmingham and Midland acquired the Central Bank of London to form the London and Midland Bank. By 1918, London City and Midland Bank was the largest bank in the world in terms of deposit. In 1923, the bank’s name was simplified to Midland Bank Ltd. During the latter half of the 20th century, Midland was one of the Big Four High Street banks in Great Britain along with Barclays, Lloyds and National Westminster.

Historically, banking in England, Scotland and Northern Ireland has always been quite separate from each other -- in other words -- English banks have very few branches and minuscule market share in Scotland and Northern Ireland, and vice versa for the Scottish and Northern Irish banks. This did not mean that banks from all three "countries" could not acquire or control banks in each other's territories, though this typically involved the much more powerful English banks taking over the Scottish or Northern Irish banks rather than the other way round. (In terms of laws, business and banking, England and Wales are much more integrated.) 

Shortly after World War I, the smaller and weaker Scottish banks found themselves in challenging market conditions, and a wave of Anglo-Scottish takeovers happened. In 1919, Midland acquired Scotland's Clydesdale Bank, and just four years later followed up by buying the North of Scotland Bank. As in all such cross-border deals, they were "affiliations" instead of full mergers, and the Scottish banks retained their independent boards of directors, names, management, branding and banknote issues. (In Scotland, banknotes are issued by commercial banks and not by the Bank of England.) It was only in 1950 that Midland's two Scottish units were finally combined into the Clydesdale and North of Scotland Bank, which eventually shortened the name to Clydesdale Bank.

In 1965, Midland bought Belfast-based Northern Bank, which operated both in Northern Ireland and the Irish Republic. Midland acquired revered stockbroker Samuel Montagu in 1974. Then in 1981, the bank bought a majority-stake in California's Crocker National Bank. The purchase proved to be a costly mistake as the U.S. went into a deep recession and loan losses mounted. Midland sold Crocker National to Wells Fargo & Co. in 1985.

Along with other major international banks, Midland had over-lent to the Third World in the late 1970s and early 1980s. In 1982, the bombshell fell when the Mexican government defaulted on its USD $100-billion foreign debt obligations. The Mexican debt default triggered a worldwide Third-World debt crisis. International banks suffered huge loan losses and Midland was no exception. To restore its capital ratio, Midland sold Northern Bank (in Northern Ireland and Ireland) and Clydesdale Bank (Scotland) to National Australia Bank Group in 1987 for a total of GBP 420-million.

In the same year, as Midland's share prices languished, The Hongkong and Shanghai Bank entered into a strategic agreement which saw Midland issuing shares representing a 14.9% stake to the Hong Kong bank for GBP 383-million. The 14.9% holding was then the maximum allowed for a foreign bank of a major British lender.

To get around the foreign holding limit, and also to avoid any future political complication with the return of Hong Kong's sovereignty to China in 1997, The Hongkong & Shanghai Banking Corporation registered a parent company HSBC Holdings plc in 1991 in London, and transferred all of its subsidiaries to the U.K. parent. Merely one year later, in 1992, HSBC offered to buy the 85.1% of Midland Bank that it didn't own for GBP 3.9-billion (USD $7.1-billion) in what was then one of the largest cross-border banking mergers in the world. At the time, Lloyds Bank plc attempted briefly to wrestle Midland Bank plc from HSBC, but withdrew its offer when it became apparent that the British Monopolies and Mergers Commission would likely deny a Lloyds-Midland merger.

Recent transaction(s):

• In 1997, HSBC bought the remaining 70.1% of Argentine bank Banco Roberts that it did not already own for USD $688-million. HSBC inherited a 29.9% stake in Banco Roberts when HSBC bought Midland Bank. Midland had acquired the minority stake in Banco Roberts in 1988.
• In 1988, HSBC bought Brazil’s Banco Bamerindus do Brasil S.A. for USD $1.0-billion. Banco Bamerindus had a network of over 1,300 branches and was based in Curitiba.
• In 1999, HSBC bought Republic National Bank of New York for USD $9.8-billion.
• In 2000, HSBC bought Crédit Commercial de France for USD $10.5-billion.
• In September 2001, HSBC acquired Turkey's Demirbank for USD $350-million (GBP 248-million). Demirbank was Turkey's fifth largest private-sector bank and had 198 branches and 650,000 retail clients.
• In 2002, HSBC bought Mexico's Grupo Financiero Bital for USD$1.13-billion (GBP 706-million). Banco Bital had more than 1,400 branches in Mexico.
• Also in 2002, HSBC bought Turkish consumer finance provider Benkar Tuketici Finansmani ve Kart Hizmetleri and the Advantage Card business for up to USD $75-million.  Advantage Card had 1.5 million cardholders.
• Also in 2002, HSBC bought U.S. consumer financing company Household International for USD $14.5-billion.
• Also in 2002, HSBC bought a strategic 10% holding in China's Ping An Insurance Co. for USD $600-million.
• In 2003, HSBC bought Lloyds TSB Group's Brazilian banking business Banco Lloyds TSB S.A.-Banco Mulitplo and consumer finance unit Losango Promotora de Vendas for GBP 490-million (USD $815-million). Both businesses were merged into HSBC's Brazilian unit Banco Bamerindus.
• Also in 2003, HSBC bought Bank of Bermuda for USD $1.3-billion.
• In 2004, HSBC bought Italian Banca Intesa BCI's Canadian unit for CAD $114-million.
• Also in 2004, HSBC purchased British department store Mark & Spencer's Retail Financial Services for GBP 488-million.
• Also in 2004, HSBC acquired 19.9% of China's Bank of Communications for USD $1.75-billion.
• In 2005, HSBC purchased another 9.91% of Ping An Insurance for HKD $8.1-billion (USD $1.04-billion), bringing HSBC's holding in Ping An to 19.9%.
• Also in 2005, HSBC bought U.S. credit card issuer Metris Companies for USD $1.59-billion.
• In 2006, HSBC took over Panama's Grupo Banistmo, Central America's largest bank, for USD $1.77-billion.
• In 2007, HSBC reached an agreement with the U.S. buyout firm Lone Star to acquire Lone Star's 51% stake in Korea Exchange Bank (KEB) for USD $6.3-billion. However, Lone Star was facing criminal charges by the Korean government for having rigged the books at KEB when 64.6% of the bank was sold to Lone Star in 2004. The Korean government alleged that Lone Star took control of KEB at an artificially-reduced price. The deal with HSBC was subject to regulatory approval being obtained by April 2008. Korea Exchange Bank had 350 branches, mostly in Korea, and operated in 17 other countries.
• In September 2008, HSBC scrapped the plan to buy KEB, citing Lone Star's refusal to re-negotiate a lower price in wake of the 2008 credit crisis, as well as on-going legal uncertainties.
• Also in 2007, HSBC received NTD $47.49-billion (GBP 734-million, USD $1.46-billion) in de facto subsidies from the Taiwan government to take over the bankrupt Chinese Bank of Taiwan. Taiwan's Central Deposit Insurance Corp. took over the control of Chinese Bank of Taiwan in January 2007 when the bank became insolvent. HSBC was expected to inject USD $300-million to $400-million to raise the bank's capital level. Chinese Bank of Taiwan's 39 branches in the island nation would join HSBC's 8-branch network.
• In February 2008, HSBC agreed to sell part of its French operations, consisting of 7 regional banks, to Banque Fédérale des Banques Populaires, for Eur 2.1-billion (USD $3.17-billion). HSBC had been under heavy criticisms from its major shareholders about its botched and costly expansion in the U.S. consumer finance and sub-prime mortgage markets. The French regional banks sold by HSBC were Société Marseillaise de Crédit, Banque de Savoie, Banque Chaix, BanqueMarze, Banque Dupuy de Parseval, Banque Pelletier and Crédit Commercial du Sud-Ouest. The 7 banks had 400 branches and 2,950 employees. The buyer Banque Fédérale des Banques Populaires is the central umbrella body of Groupe Banque Populaire. Following the sale, HSBC would retain 380 branches in France.
• In 2008, HSBC bought 73.21% of India's retail brokerage IL&FS Investsmart Ltd. (Investsmart) for INR 10.23-billion (USD $242-million). HSBC bought 43.85% of Investsmart from E*Trade Financial and a 29.36% stake from India's Infrastructure Leasing and Financial Services Ltd. HSBC would also make an open offer to take up up to 20% of the remaining Investsmart shares. Investsmart had 138,000 clients, 2,000 employees, 88 branches and 190 franchisee outlets in India.
• In 2008, HSBC agreed to buy 88.89% of Indonesia’s Bank Ekonomi for USD $607.5-million (GBP 351-million, Eur 453-million). The purchase would double HSBC’s presence in Indonesia to 190 branches. HSBC would also need to make a tender offer for the remaining 10.11% of Bank Ekonomi.
• In March 2009, HSBC raised GBP 12.5-billion (USD $17.7-billion, HKD $137.7-billion) of new capital through a rights issue. At the same time, the bank announced that it’s writing off its entire investment in the former Household International (now HSBC Finance) unit. HSBC bought Household International in 2002 for USD $14.5-billion. The closure of HSBC Finance (excluding the credit card business) would result in 6,100 job losses and closing down 800 offices.
• In late 2009, HSBC announced that the office of the Chief Executive Officer would be moved back to Hong Kong as of February 2010. Though for regulatory and obvious political reasons, HSBC would continue to have its headquarters in London. HSBC would be the only major bank in the world to have its CEO located in a completely different jurisdiction from its jurisdiction of registration.
• In October 2009, HSBC raised its stake in Vietnamese insurer Bao Viet to 18% from 10% for USD $105-million (GBP 63-million, HKD $814-million). HSBC had the right to further increase its holding to 25% by 2012.
• In June 2010, HSBC bought the Royal Bank of Scotland's Indian retail banking operations for an undisclosed amount. RBS India had 1.1 million clients and 31 branches. HSBC already had 2 million clients and 50 branches in India.
• In August 2010, HSBC announced that it's in talks with Anglo-South African financial services firm Old Mutual plc to acquire Old Mutual's 53% stake in Nedbank Group Ltd., plus another 17% of Nedbank from the open market, for up to USD 6.8-billion (ZAR 49.9-billion). In October, the talks ended without a deal.
• In July 2011, HSBC agreed to sell 189 New York branches (183 in upstate New York and 6 in New York City suburbs) and 6 Connecticut branches to Buffalo-based First Niagara Bank for USD $1.0-billion (GBP 609-million, HKD $7.8-billion). Most of the branches sold had originally belonged to Marine Midland Bank, which was acquired by HSBC between 1980 and 1987. HSBC was paring down its money-losing U.S. operations.
• In August 2011, HSBC sold a vast majority of its U.S. credit card operations to Capital One Financial for USD $32.7-billion (GBP 20.15-billion, HKD $254.86-billion). The amount represented a premium of USD $2.6-billion over the portfolio's book value of USD $30.4-billion. The sale was the latest retreat of HSBC in the U.S. following its disastrous purchase of Household International in 2003. HSBC would book a gain of USD $2.4-billion from the sale.
• In September 2011, HSBC sold its Canadian retail brokerage unit, HSBC InvestDirect Canada, to the National Bank of Canada for CAD $206-million (USD $206-million, GBP 130-million, HKD $1.55-billion).
• In May 2012, HSBC announced the sale of its operations in Colombia, Uruguay, Peru and Paraguay to Colombian-based Banco GNB Sudameris for USD $400-million. The operations sold included 24 branches in Peru, 20 in Colombia, 11 in Uruguay and seven in Paraguay and USD $4.4-billion of assets. However, in 2014, HSBC announced that the sale of its Uruguay operations had been terminated and it would continue to operate in that country.
• In December 2012, HSBC sold its entire 15.6% stake in China's Ping An Insurance to Thailand's Charoen Pokphand Group for USD $9.38-billion (GBP 5.77-billion, HKD $72.7-billion).
• In February 2014, HSBC sold its Kazakhstan operations to Halyk Savings Bank for USD $176-million.
• In August 2015, HSBC agreed to sell HSBC Bank Brasil to Banco Bradesco for BRL 17.6-billion (USD $5.19-billion, GBP 3.33-billion). HSBC Bank Brasil had 5-million clients, 851 branches and over 4,700 ATMs, and provided banking, insurance and asset management services. The sale was part of HSBC's plan to exit markets where it could not compete effectively with local rivals.
• In May 2018,HSBC's 40%-owned Saudi British Bank (SABB) and The Royal Bank of Scotland's 40%-owned Alawwal Bank agreed to merge to become Saudi Arabia's No. 3 bank. Under the preliminary non-binding agreement, SABB would acquire Alawwal in stock for SAR 18.6-billion (USD $4.96-billion, GBP 3.68-billion).
• In May 2021, HSBC announced that it was exiting the "mass market" retail operations in the U.S. Out of its 148 American branches, which were mostly in the New York City area and in California, 80 U.S. East Coast branches along with their employees and accounts were sold to Rhode Island-based Citizens Bank. The 80-branch network transaction included 66 Metropolitan New York City area offices, nine in the Mid-Atlantic/ Washington D.C. area and five in Southeast Florida, as well as 800,000 client accounts, USD $9.2-billion in deposits and USD $2.2-billion in loans. This would be Citizens' first entrance into the New York City. At the same time, HSBC sold its ten branches in California to Los Angeles-based Cathay Bank. Cathay would gain 50,000 client accounts as well as USD $1-billion in deposits and USD $800-million of loans. Following the two sales, HSBC would close down another 35 to 40 branches, and maintain only 20 to 25 branches in the U.S. to serve high net-worth clients with at least USD $75,000 in their accounts, as well as enterprise businesses with annual revenue of no less than USD $5-million.
• In June 2021, HSBC agreed to give away its French retail banking operations to Cerberus Capital Management's My Money Group (it was actually sold for one single Euro). HSBC will transfer 244 branches, around 3,900 staff and 24 billion euros in assets in France to My Money, which will resurrect the branding Crédit Commercial de France (CCF). HSBC had bought CCF in 2000 for USD $10.5-billion. HSBC will book a USD $2.3-billion loss on the transaction.
• In August 2021, HSBC acquired French insurer AXA's Singapore operations for USD $575-million. HSBC said in a statement that the combined unit comprising HSBC Life Singapore and Axa Singapore would be the seventh-largest life insurer and the fourth-largest retail health insurer in Singapore, with over 600,000 policies in-force covering life, health and property and casualty insurance. HSBC currently ranks 10th in life insurance in Singapore, and does not have a health insurance business.
• In November 2022, HSBC agreed to sell its Canadian operations HSBC Bank Canada to the Royal Bank of Canada for CAD $13.5-billion (USD $10.1-billion) in cash. HSBC Canada had CAD $134-billion of assets and served its 770,000 retail clients through a 130-branch network from coast to coast and 4,200 employees. HSBC Bank Canada was strong in corporate banking where commercial clients relied on HSBC's expansive global operations, as well as in retail banking in the affluent Hong Kong and Chinese expat communities in Canada.
• On 2023-03-13, the first business day following the collapse of California's Silicon Valley Bank over the weekend, HSBC took over Silicon Valley Bank UK (SVB UK) Ltd. for GBP 1 (USD $1.21) in a deal facilitated by the Bank of England to prevent SVB UK from entering insolvency and disrupting the banking service of its UK tech start-up clients. SVB UK had had loans of around GBP 5.5-billion and deposits of around GBP 6.7-billion. For the financial year ending 31 December 2022, SVB UK recorded a profit before tax of GBP 88-million. SVB UK’s tangible equity is expected to be around GBP 1.4-billion
• In October 2023, HSBC agreed to acquire Citigroup's retail wealth management portfolio in mainland China. The portfolio comprised of USD $3.6-billion in assets and deposits, and the associated wealth customer accounts across 11 major cities. The purchase excluded credit cards, mortgages and other loans of Citi China.
• In February 2024, HSBC wrote down the value of its 19% holdings in China's Bank of Communications by USD $3.0-billion to comply with new accounting rules that came into effect.
• Also in February 2024, HSBC received approval from Russian president Vladimir Putin to sell its Russia unit to Expobank. HSBC exited the retail banking business in Russia back in 2011, and had only served corporate clients in Russia since then.
• In April 2024, HSBC agreed to sell its Argentina operations to Grupo Financiero Galicia for USD $550-million. HSBC Argentina served around one million customers through its 100-plus branch network and 3,100 employees.  HSBC will book a USD $1-billion pre-tax loss on the disposal.
• In late 2024, HSBC announced that it would re-organize its operational structure. The bank's existing three main divisions: commercial banking, global banking and markets, and wealth and personal banking would be re-structured into four divisions based partly by geography. The four new divisions would be: Hong Kong (in charge of HSBC's Hong Kong, Asia and Middle East personal banking and commercial banking); UK (in charge of UK's personal banking and commercial banking); Corporate & Institutional Banking (global wholesale banking and cross-border transaction banking, and commercial banking outside of Hong Kong and UK); International Wealth & Premier Banking (global private banking, asset management, insurance and Premier banking outside of  Hong Kong and UK).
• In late 2025, HSBC's Hong Kong unit The Hongkong and Shanghai Banking Corporation announced that it was offering HKD $106.1-billion (USD $13.63-billion) to buy out the 36.5% of Hong Kong's Hang Seng Bank that it didn't already own. HSBC rescued Hang Seng Bank back in 1965 during a liquidity crisis at the latter. Hang Seng Bank subsequently survived and became one of Hong Kong's largest banks. At the time of announcement, Hang Seng bank had almost 4-million clients in Hong Kong and China, with 250 branches. In recent years though, Hang Seng's loan losses soared due to a prolonged slump in Hong Kong and China's real estate market. The HSBC offer valued the entirety of Hang Seng at HKD $290-billion (USD $37.2-billion). HSBC said it would retain Hang Seng Bank's brand and products.

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