Barclays to acquire ING Direct UK
- 9 October 2012
- From the section Business
Barclays Bank has agreed to buy ING Direct UK, taking on its £10.9bn deposits and £5.6bn mortgage book.
The deal will involve the transfer of 750 ING Direct staff and 1.5 million customers to Barclays.
Dutch banking group ING announced it would exit UK retail banking in August, as it seeks funds to repay a bailout from the Dutch government in 2008.
Barclays said it would eventually integrate the ING customers into its existing UK retail business.
"We intend to maintain the high standard of service and honour the existing terms and conditions [customers] have experienced with ING Direct," said the head of Barclays' UK retail banking business, Ashok Vaswani.
ING said it would incur a 260m-euro ($335m; £210m) after-tax loss on the sale.
The loss was in part due to its agreement to sell its mortgages to Barclays at a price 3% below the level at which ING values them in its accounts.
The deal follows a similar sale by ING of its US business to credit card firm Capital One at the beginning of this year.
The Dutch bank, which has its head office in Reading, first launched its "ING Direct" online banking venture in the UK in 2003. It continues to operate similar ING Direct units in Australia and across much of Europe. ING will continue its commercial banking operation in the UK.
The withdrawal of ING' retail operations from the UK will further increase the concentration of UK banking services into a small number of players.
It follows the emergency merger of Lloyds and Halifax Bank of Scotland in 2008 amid the financial crisis, as well as the acquisitions of Abbey, Bradford & Bingley and Alliance & Leicester by the Spanish bank Santander.
The government has sought to increase competition, with the sale of Northern Rock's depositors and branch network to Virgin Money.
In addition, as a condition of Lloyds buying Halifax Bank of Scotland, the EU forced Lloyds to sell 632 of its branches, which are now set to be bought by the Co-operative Bank.