The deal will double the size of Halifax's centralised mortgage loan book. It will increase its share of the pounds 350bn UK mortgage market from 15.5 per cent to 16 per cent, taking its total loan portfolio to more than pounds 56bn.
The society hopes to complete the deal before Christmas. The BNP subsidiary will continue to trade in its present form, and there will be no redundancies among its 150 employees, located in Cardiff.
Gary Marsh, head of group corporate affairs at Halifax, said the society was also in acquisition talks with several other centralised mortgage lenders. A significant number of financial services companies have been retreating from centralised mortgage lending as low interest rates have made profits harder to come by.
Mr Marsh said that Halifax wanted to expand through organic growth, mergers with other societies and buying mortgage books.
There may be another acquisition this year, he said. 'Good quality mortgage assets are available at the moment. We are interested in buying them.'
Analsyts suggested the move may be a reaction to the prospect of the Lloyds Bank takeover of Cheltenham & Gloucester, which will make Lloyds the fifth largest home lender in the UK.
Robert Villiers of UBS argues that size is vital in the mortgage market at the moment. 'If the quality of the book is good, any rise in assets is quickly followed by a rise in profits. This is a very desirable purchase for the Halifax, giving it market share cheaply.'Reuse content