Barclays Buys ING Direct To Boost Retail Arm
Barclays has said it will buy savings and mortgages company ING Direct UK in a deal that will boost its savings business by almost £10.9bn.
In August, Dutch bank ING said it planned to quit the British retail banking market and, as such, will effectively pay Barclays to take its UK business.
Barclays will gain 1.5 million new customers and 750 staff following the purchase.
It will also acquire ING Direct's mortgage book with outstanding balances of £5.6bn, buying the loans at a 3% discount which will leave ING with a 320m euro (£258m) loss on the transaction after tax.
But the deal should also release around 330m euros (£266m) of ING's capital, helping it to repay Dutch state aid it received in 2008 and increase its capital level.
ING Direct employs 500 staff in Reading, and a further 250 in Cardiff, although Barclays said it was too early to say if there would be redundancies.
Barclays, which will integrate ING Direct into its retail and business banking division, stressed that it will honour customers' existing terms and conditions in a statement.
"Until integration, Barclays will continue to utilise ING Direct UK's operations and platforms to service existing customers," it said.
"Customers are expected to continue to enjoy at least equivalent terms and conditions to those which they currently enjoy with ING Direct UK."
Subject to regulatory approval, the deal is expected to go through in the second quarter of next year.
Barclays' new chief executive, Antony Jenkins - who took over from Bob Diamond after the Libor rate fixing scandal - has signalled that he intends to focus more on retail banking than riskier investment banking.