Standard Life Bank sold to Barclays
Standard Life has sold its retail banking business to Barclays, for £226 million.
Under the terms of the transaction, Barclays will acquire a savings book of approximately £5.5 billion and a mortgage book with outstanding balances of around £8.8 billion (both figures as at 30th June 2009).
The unit, which was set up in 1998, reported underlying profit before tax of £26 million in 2008 and £15 million for first six months if 2009, after which it has “traded well”.
The lender’s new mortgage business has contracted severely during the credit crisis although mortgage arrears were well below the industry average for the first half of the year.
Completion is expected in the first quarter of 2010 when approximately 270 Standard Life employees will transfer to Barclays.
In a separate agreement, the life and pensions provider says it is developing a strategic agreement to explore joint opportunities with Barclays in the UK’s retail long-term savings and investments sector, initially focusing on the development of a pension product.
Commenting on the sale, Standard Life’s outgoing group chief executive, Sir Sandy Crombie, says: “We no longer believe that increasing the lending activity of the bank is consistent with our long-term financial objectives.”
He adds: “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.”
Category: Financials, Insurance News, Standard Life News
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