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LONDON: British bank Barclays on Monday bought the home loans and savings arm of insurer Standard Life, pursuing its expansion strategy after the part-purchase of failed US titan Lehman Brothers last year.
Barclays, which has avoided state control unlike rival British banks that were beaten by the credit crunch, said in a statement it will buy Standard Life Bank for 226 million pounds (246 million euros, 369 million dollars) in cash.
Around 270 Standard Life employees will transfer to Barclays upon completion of the deal, which was expected in the first quarter of 2010 subject to regulatory approval.
The news comes more than one year after Barclays clinched a deal to acquire the North American investment banking and capital markets businesses of collapsed Lehman for 1.75 billion dollars (1.24 billion euros).
Barclays added on Monday that it would also explore further strategic opportunities with Standard Life in the savings and investments sector.
"The acquisition of Standard Life Bank is a good fit with Barclays existing UK retail banking business," said Frits Seegers, chief executive of Barclays Global Retail and Commercial Banking, in the statement.
He added: "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 Bank, which has no retail branch network, was launched back in 1998.
The division had posted underlying pre-tax profits of 26 million pounds in the year to the end of December 2008. It also saw pre-tax profits of 15 million pounds in the six months to the end of June 2009.
"Barclays Bank plc has agreed to acquire Standard Life Bank plc from Standard Life for a consideration of 226 million pounds," Barclays said.
"Under the terms of the transaction, Barclays will acquire a savings book of approximately 5.5 billion pounds, as at 30 June 2009, and a mortgage book with outstanding balances of approximately 8.8 billion pounds."
Sandy Crombie, chief executive of Edinburgh-based Standard Life, said that the group no longer wanted to increase lending.
"We no longer believe that increasing the lending activity of the bank is consistent with our long-term financial objectives," Crombie said in a separate statement.
"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."
Barclays bank successfully steered a path through the global financial crisis which erupted in late 2007.
The bank had last year won a seven-billion-pound capital injection largely backed by Abu Dhabi and Qatar, as it survived the credit crunch without government aid. But Abu Dhabi has since sold most of its holding.
In addition, Qatar's sovereign wealth fund, the Qatar Investment Authority, last week trimmed its Barclays stake to about seven percent. - AFP/de
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