Barclays is to buy Standard Life Bank in a deal worth up to £226 million.
A total of 287,000 savings customers and 78,000 mortgages will move over to Barclays.
Standard Life made the announcement as it revealed it did not see “growing the volume of lending activity as being consistent with the long-term financial objectives” of the firm – after it limited lending through the downturn.
Barclays and Standard Life have also agreed to look at joint opportunities in the UK retail long-term savings and investments markets.
The Standard Life Bank in the UK has outstanding mortgage loans of £8.8 billion and customer deposits of £5.5 billion.
A Standard Life spokesperson said: “There will be no change in terms and conditions for customers, but they will move over to the new owner in the new year.”
A Barclays spokesperson added: “There should be no change initially for customers. Standard Life customers like banking with Standard Life because it has a small bank feel.
“We would like to keep that customer experience, but give them access to broader products from Barclays.”
She added: “As mortgage customers come up to remortgage at the end of fixed rate deals, we hope they will come to a Woolwich mortgage.”
The sale of Standard Life is just another of the mergers that have limited customer choice in the UK, as HBOS fell into Lloyds Banking and Santander took on Alliance & Leicester, Abbey and Bradford & Bingley.
Ray Boulger, at mortgage broker John Charcol, said: “Today’s announcement isn’t great news for consumers, as it means that one of the dwindling number of brands still active in the mortgage market may well disappear next year.
“Standard Life Bank is one of the few lenders still offering mortgages with fixed rates for longer than five years and is also one of a relatively small number of lenders still in the buy-to-let market.”
However, he explained the firm’s limited appetite for lending has seen its rates becoming uncompetitive.
The 268 employees who support Standard Life’s UK mortgage and savings business will transfer to Barclays.
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