Barclays seals deal to buy StanLife Bank
BARCLAYS yesterday agreed to pay £226m for the banking division of Standard Life, allowing the Edinburgh-based life insurer to refocus on its core business.
The relatively modest deal will add £5.5bn in deposits and 287,000 new accounts to Barclays’ massive base of 15m current account customers.
The banking unit last year became a thorn in the side of Standard Life when it was hit with liquidity problems as a result of the credit crunch, forcing management to curtail lending to customers.
The transaction, which came in at the low end of expectations of between £200m to £300m will also deliver 78,000 new mortgages worth £8.8bn to Barclays.
The disposal is another example financial institutions reverting to their core operations since the credit crisis. ING yesterday announced plans to sell its insurance operations to concentrate on banking.
Standard Life chief executive Sir Sandy Crombie said: “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 deal is scheduled for completion early next year when 268 of Standard Life’s 10,000 employees will transfer to Barclays.
Frits Seegers, chief executive of Barclays global retail and commercial banking division, said: “This transaction brings to Barclays high-quality savings and mortgage books, and an attractive customer base.”
Meanwhile, Barclays and Standard Life have forged an agreement to work together on pension products.
The deal will start with the online and phone customers of Barclays Direct being offered a Standard Life Self-Invested Personal Pension (SIPP) product.
FRITS SEEGERS
CEO BARCLAYS GLOBAL RETAIL AND COMMERCIAL BANKING
1825 Standard Life Assurance Company established
1925 Reincorporated as a mutual assurance company
1998 Standard Life Bank established, creating a UK mortgage and retail savings banking subsidiary separate to investment management unit
1999 Unveils an aggressive strategy to double its share of UK mortgage market to 15 per cent
March 2005 Standard Life group makes the pursuit of profit its main aim for the year ahead of its planned stock market flotation next year.
March 2008 Standard Life group posts healthy profits with the exception of banking sparking rumours that the division would be put up for sale
January 2009 Bank reports its mortgage business has been decimated after the housing market collapse. Net outflows reach £1.6bn.
February 2009 Anne Gunther announces she will quit as chief executive of Standard Life Bank
September 2009 Barclays emerges as possible bidder for Standard Life Bank
October 2009 Deal to sell business to Barclays for £226m announced.