Barclays to acquire Standard Life Bank for £226m

26 October 2009 | By Natalie Thomas

In a statement on the London Stock Exchange, the bank has revealed that under the terms of the deal Barclays will acquire a a mortgage book with outstanding balances of approximately £8.8bn as at June 30 2009, with an average indexed LTV ratio of 48%.

Barclays will also acquire a savings book worth approximately £5.5bn as at June 30 2009.

On completion of the deal all the 270 Standard Life employees who worked for Standard Life Bank will transfer to Barclays.

Standard Life Bank reported an underlying pre-tax profit of £15m for the first half of the year and £26m for the year to December 31 2008 .

Standard Life has confirmed to Barclays that Standard Life Bank has traded well since its first half results were published.

Barclays says the price is based on an estimated tangible net book value of £293m and is subject to changes to its value at the time of completion.

Completion is subject to regulatory approval and is expected to occur in Q1 next year.

Barclays UK’s retail banking arm has also agreed with Standard Life to enter into a strategic agreement to explore joint opportunities in the UK retail long-term savings and investments sector.

The initial focus is expected to be on the development of a multi-channel, simplified pension product.

Frits Seegers, chief executive of Barclays Global Retail and Commercial Banking, 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.”

Sir Sandy Crombie, group chief executive of Standard Life, 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.”

 

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