UK bank Barclays Bank PLC (BCS,BARC.L) said Monday that it agreed to acquire Standard Life Bank Plc from Standard Life Plc for a consideration of GBP 226 million, payable in cash upon completion.
As per the terms of the transaction, Barclays will acquire a savings book of about GBP 5.5 billion, as at 30 June 2009, and a mortgage book with outstanding balances of about GBP 8.8 billion, as at June 30, 2009, with an average indexed loan to value ratio of 48% at that date. On completion, about 270 Standard Life employees will transfer to Barclays.
The price is based on an estimated tangible net book value of GBP 293 million and is subject to adjustment based on changes to Standard Life Bank's tangible net book value at completion. Completion is expected to occur in the first quarter of 2010.
Standard Life Bank reported IFRS underlying profit before tax of GBP 26 million for the year ended December 31, 2008 and GBP 15 million for the half-year ended June 30, 2009. Standard Life has confirmed to Barclays that Standard Life Bank has traded well since June 30, 2009.
Separately, Barclays UK Retail Banking and Standard Life have also agreed heads of terms to enter into a strategic agreement to explore joint opportunities in the UK retail long-term savings and investments sector. The companies expect to focus initially on the development of a multi-channel, simplified pension product.
Frits Seegers, Chief Executive of Barclays Global Retail and Commercial Banking, said: "The acquisition of Standard Life Bank is a good fit with Barclays existing UK retail banking business. This transaction brings to Barclays high-quality savings and mortgage books, and an attractive customer base. We also look forward to working together with Standard Life in the long-term savings and investments sector. We believe that we will be able to drive significant value for customers and shareholders - both through this acquisition and through the strategic initiative."
BCS is currently trading at $23.43, up $0.05 or 0.21%, on 326,991 shares.
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