Barclays buys Standard Life bank for £226m

Barclays today agreed to buy the banking business of insurer Standard Life for £226m.

The banking giant currently has around 15 million retail banking customers in the UK. It will take on another 350,000 through the deal along with Standard Life's £5.5bn savings book.

Frits Seegers, the chief executive of Barclays' retail and commercial banking business, said: "This transaction brings to Barclays high-quality savings and mortgage books, and an attractive customer base."

Standard Life Bank, which was launched in 1998, has no branches and made an underlying pre-tax profit of £26m last year.

It has an affluent savings base of 287,000 accounts with an average deposit of more than £19,000.

The business also has an £8.8bn loan book and 78,000 mortgage accounts, although the bank has limited its lending activity during the current downturn.

The banking arm is no longer part of the insurer's long term plans for the business, but Standard Life and Barclays have also agreed to explore joint opportunities in UK retail savings and investments - beginning with the development of a simplified pension product.

Standard Life chief executive Sir Sandy Crombie said: "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."

Around 270 staff will transfer to Barclays when the deal completes early next year.