Barclays has snapped up the online bank ING Direct UK in the first deal struck under its new chief executive Antony Jenkins.
ING was ordered to sell off several businesses under European state aid rules and put its UK online arm up for sale in August. It has 1.5 million customers and employs 750 people, who will transfer to Barclays.
The bank, once highly competitive in its savings rates, has £10.9bn of savers' deposits and a mortgage book of £5.6bn.
ING said that it will book a loss of €260m (£212m) on the sale to Barclays, which in effect means it is paying the British bank £168m in order to take the business off its hands.
Barclays said ING customers would "enjoy at least equivalent terms and conditions" as their current ING ones.