Standard Life has sold its Standard Life Bank arm yesterday to Barclays, Times Online has reported.
The insurer?s chief executive, Sir Sandy Crombie, said that expansion of the bank was no longer consistent with the long-term financial aims of the group. Standard Life Bank began to turn in a profit six years ago, but overall losses since launch were ?45 million, with a further ?40 million written off from the initial investment.
Barclays, with no other serious competitors to buy the bank, paid ?226 million ? a 23 per cent discount to the bank?s book value of ?293 million. Ministers had hoped there would be other contenders to challenge the five-company oligopoly of the banking sector.
Mortgage consumers are unlikely to benefit from the deal. Ray Boulger of mortgage broker John Charcol, said: ?One of the dwindling number of brands still active in the mortgage market may well disappear next year when the sale is concluded.?
Standard Life Bank had built up a portfolio of 350,000 depositors with ?5.5 billion in deposits, and a mortgage book of ?8.8 billion, achieved by innovative products and competitive pricing. The bank was a leader in customer-friendly loan products, which included flexible offset mortgages and long-term fixed-rate mortgages.
Barclays said there were no immediate plans for redundancies and the 270 Edinburgh-based staff would all transfer to Barclays. The Standard Life Bank name will be lost.
The Standard Life mortgage book will boost Barclays? own mortgage portfolio by 10 per cent. The mortgages are felt to be reasonably conservative, with an average loan-to-value ratio of 48 per cent ? Barclays? is 44 per cent. The book has some buy-to-let mortgages and some 100 per cent mortgages to professional clients.
