ING Direct, the Dutch financial group, yesterday sold its £16.5bn mortgage and savings book to Barclays at a loss of £168m, as it bid farewell to the UK retail banking market.
The deal, which is a major boost for Barclays’ retail base, will see Barclays take on 1.7m ING customer savings accounts with deposits of £10.9bn. It will also acquire a 40,000-strong mortgage book worth £5.6bn, which has been sold to the British bank at a three per cent discount, or £168m.
The Dutch listed firm, known for its orange lion logo, had been publicly hinting at a sale of its UK retail assets since early August, when it formally announced a review of its UK and Canadian operations in a bid to shift its focus to commercial banking. The deal, which is understood to have been in development since the summer, is the last known strategic move instigated by former Barclays chief executive Bob Diamond, before he was replaced by new chief Antony Jenkins.
The deal will complete in the second quarter next year and the integration of ING’s UK customer base and workforce base will be completed by 2015. Barclays will ditch the ING Direct brand after the integration.
The sale is the latest push by ING Direct to “sharpen” its focus on commercial banking and shift away from retail. For Barclays, it follows a pattern of retail banking bolt-on acquisitions. It snapped up Egg credit card assets in 2011 and Standard Life bank in 2009.
ING was advised on the deal by Credit Suisse and law firm Freshfields Bruckhaus Deringer. Barclays took legal advice from Linklaters.