A joint statement issued here on Wednesday by ABN Amro Bank and BankAm said, "ABN Amro will buy the retail-banking businesses of BankAm that represents the net book value of assets minus liabilities, plus a premium payment to BankAm. In addition, ABN Amro will make an initial capital injection to fund the businesses. The total of the purchase price, and the capital injection will be less than $200 million," adding that "BankAm will continue to offer wholesale and capital-market services throughout the region and commercial-banking services in Hongkong and Macau."

ABN Amro Asia Pacific's chief executive officer Sergio Rial said, "At ABN Amro, we are excited about our potential to accelerate the growth of ourconsumer-banking activities in India, Singapore and Taiwan. BankAm's strategic decision to sell these successful and profitable businesses offered us an unprecedented opportunity to expand our prescence in Asia. The fact that our two computer systems are compatible, enabling us to offer customers complementary services, was an important determinant for both parties." ABN Amro will now replace BankAm in its role as co-branding credit partner with China Airlines.

In his statement, BankAm group executive vice-president James Hulihan said, "We will work closely with ABN Amro in each country to ensure that our customers continue to receive a high quality of service through this transition. Customers need not take any action now. We will ensure that they are provided timely information to assist them as we move forward."

ABN Amro Bank's chief excutive officer (India) Ramesh Sobti, told The Financial Express that "ABN Amro intends to absorb most of BankAm's around 280 retail-banking employees. We don'thave surplus staff." ABN Amro Bank has 507 employees in its five-branch domestic network. Sobti said, "Remuneration to erstwhile BankAm employees will be extremely competitive, and and from all accounts they (BankAm staff) are very good. 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."

ABN Amro Bank also announced that it had appointed former BankAm's consumer-banking head N Rajashekaran as its chief of consumer-banking operations. Meanwhile BankAm's senior vice-president and country manager (India retail banking group), Anuroop "Tony" Singh will join ANZ Grindlays Bank as its country head (India) and regional head, personal financial services in south-Asia and the middle-East.

The deal will make ABN Amro Bank a full services player in the country. Thus far a largely corporate banking with strong capabilities in corporate banking, structured and project finance, treasury products and services, the Dutchentity has in recent times moved into the equities and debt markets through the newly set up ABN Amro Equities, ABN Amro Securities (India), and a money market mutual fund. In 1998, ABN Amro Bank announced its foray into retail banking in India and the acquistion of BankAm's retail banking business completes the entire services range.

"We intend to widen our product range, and in addition to the acquired portfolio of BankAm car finance, mortgages, and advance against shares schemes more will be on offer. Our plans to introduce credit cards will now be a top priority," Sobti said.

The joint announcement by ABN Amro Bank and BankAm ends months of speculation over the potential buyer. ABN Amro has pipped other strong contenders like Banque Nationale de Paris and Citibank to acquire BankAm's retail businesses. BankAm's decision to sell its retail operations follows the changed business priorities in the aftermath of its merger with Nationsbank.