Barclays To Purchase Standard Life Bank
The recent trend over the course of the past few years, of banks and building societies merging and taking one another over in buy out deals, seems to be showing no signs of slowing down, as Barclays bank has announced that it intends to buy Standard Life Bank, for a sum of £226 million, although the sale is subject to approval by regulators, amongst other factors.
If all goes well for Barclays, it hopes to complete the transaction by the end of the first three months of next year, at which time 270 Standard Life employees will move to Barclays.
Standard Life bank is an attractive proposition for Barclays, as it appears to be one of the few banks which has managed to stay out of trouble due to the effects of the credit crunch.
It currently holds customer savings of around £5.5 billion and has a home owner loan book with a balance of around £8.8 billion. More importantly, the loans offered by Standard Life bank have been very low risk, with low arrears levels and an average loan to value ratio which currently stands at just 48 per cent loan to value. Standard Life Bank made a profit of £26 million in 2008 and a profit of £15 million for the first half of this year.
Whilst both Barclays and Standard Life are very happy with the deal, many industry experts have been quick to point out that this take over is likely to further reduce the choice of available home owner loan deals on the market and leading us into the situation where we are left with just a handful of companies who are able to offer loans. Standard Life Bank is currently one of only a few lenders who are still offering reasonable loan deals as well as buy to let loans.
