Barclays To Acquire ING Direct UK

PUBLISHED: Oct 09 2012 @ 08:08 | Comments (0) | More info about Kenneth G. Mondero

Britain’s second largest bank by asset, Barclays (LSE:BARC), is poised to expand its reach after agreeing to acquire a competitor’s savings and mortgage business in the UK to be added to the bank’s retail operation and said the deal will immediately be “accretive” to the bank’s return on equity.

In a statement today, Barclays disclosed it will take-over £10.9 billion of deposits and £5.9 billion worth of mortgage book at a 3% discount of ING Direct UK, an online banking business of Netherlands-based ING Group in the UK, following the Dutch financial group’s review of its position in the country initiated in August 2012,

ING Group, an international banking, investment, insurance, and retirement services provider, has been divesting assets around the world to meet its obligations following its own bailout in the 2008 financial crisis.

“We will be delighted to welcome ING Direct UK customers to Barclays,” commented Ashok Vaswani, Chief Executive of the bank’s UK retail and business banking, which as at 30^th June 2012, has mortgage balance of £110 billion with a loan to value ratio of 44% and customer deposits of £113.9 billion.

The deal will also see the transfer of ING Direct’s 750 employees and approximately 1.5 million customers, who will be integrated into Barclays’ retail and business banking unit.

“Customers are expected to continue to enjoy at least equivalent terms and conditions to those which they currently enjoy with ING Direct UK,” Barclays assured.

“We intend to maintain the high standard of service and honour the existing terms and conditions they have experienced with ING Direct UK. The acquisition of ING Direct UK is a good fit with Barclays existing UK retail banking business,” Mr. Vaswani continued.

ING’s Chief Executive, Jan Hommen, said Barclays will continue to provide “excellence service” to the customers the group is leaving behind in the UK, but also stated its operations in Austria, France, Germany, Italy, Spain, and Australia will be unaffected by the decision.

Both ING and Barclays stated the impact of the transaction, the value of which is undisclosed, in its Core Tier 1 capital will be neutral but will result in an after-tax loss of €260 million on the part of ING.

Share price of Barclays was up 1.4% to 225.55 pence at 12:50 PM GMT at a volume of over 11 million shares.

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