Barclays acquires Standard Life bank
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Barclays has agreed to acquire Standard Life Bank in a deal worth £226m.
Under the terms of the transaction, Barclays will acquire a savings book of approximately £5.5bn, as at June 30, 2009, and a mortgage book with outstanding balances of approximately £8.8bn, as at June 30, 2009, with an average indexed loan to value ratio of 48 per cent.
On completion, approximately 270 Standard Life employees will transfer to Barclays.
The two firms have also agreed to enter into a strategic agreement to explore “joint opportunities” in the retail long-term savings and investments sector.
The initial focus will be on the development of a multi-channel, simplified pension product.
Barclays global retail and commercial banking chief executive Frits Seegers says: “The acquisition of Standard Life Bank is a good fit with Barclays existing UK retail banking business.
“This transaction brings to Barclays high-quality savings and mortgage books, and an attractive customer base. We also look forward to working together with Standard Life in the long-term savings and investments sector.
“We believe that we will be able to drive significant value for customers and shareholders - both through this acquisition and through the strategic initiative.”
Standard Life group chief executive Sir Sandy Crombie says: “Since its launch in 1998 Standard Life Bank has grown steadily, but we no longer believe that increasing the lending activity of the bank is consistent with our long-term financial objectives.
“The transaction we have agreed with Barclays, along with the strategic agreement we have also announced today, supports our plan for growth as an asset managing business and will result in significant potential for future value creation for both parties.
“Barclays is an attractive partner for Standard Life, and also provides continuing security for the existing depositors and bondholders of Standard Life Bank.
“We look forward to working with Barclays to shape this strategic agreement and explore new market opportunities.”
The deal is subject to FSA approval but is expected to complete in the first quarter of 2010.
John Charcol senior technical manager Ray Boulger says: “Today’s announcement isn’t great news for consumers, as it means that one of the dwindling number of brands still active in the mortgage market may well disappear next year when the sale is concluded. “
Boulger says Standard Life Bank is one of the few lenders still offering mortgages with fixed rates for longer than five years, adding: “Its rates have been uncompetitive for some time, which is an indication it currently has little appetite to lend.”
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Readers' comments (7)
Anonymous | 26 Oct 2009 2:52 pm
Another lender bites the dust!!!!!!!!!!!!!!!!
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Anonymous | 26 Oct 2009 3:05 pm
Another provider goes back to basics:their core competency.
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Alan Steel | 26 Oct 2009 3:38 pm
A simplified pension product sounds like personal accounts.
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Anonymous | 26 Oct 2009 3:49 pm
If providers had stuck to their core business activities would today's headaches have been avoided? In many instances I think so. But what do I know. Nothing I hear you cry.
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John Harding | 26 Oct 2009 3:57 pm
OK so we can understand Standard Life divesting itself of non-core activities but if it is allowed to sell to an already very big player in the UK market then this will be wrong and bad for the UK consumer.
There have to be serious competition issues here with a big UK bank further strengthening it's position by scooping up another, all be it relatively small, UK banking business.
The FSA should look at this very thoroughly but I doubt they will, proving once again to be another dereliction of duty. Like the banks they protect they still don't get it!
It would be good if another bank were to express interest, such as Virgin or an overseas bank as that might open things up.
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Peter Davies | 26 Oct 2009 5:03 pm
GOOD RIDANCE TO STANDARD LIFE. WITH AN SVR of 5.5% or so I will be glad to see them go. But will Barclays transfer them onto their SVR??
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Anonymous | 27 Oct 2009 6:07 pm
I agree Peter, 5.34% was very high. Barclay's have a little used SVR of 4.99% which is an improvement but not particularly competitive.
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