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Barclays acquires ING Direct UK

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  • 09/10/2012
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Barclays acquires ING Direct UK
Barclays has bought ING Direct UK and will merge the mortgages and savings business into its retail banking operations.

The deal will see Barclays take control of ING Direct’s £10.9bn deposits and  £5.6bn mortgage book.ING said the sale would result in a £260m after-tax loss, and is being acquired by Barclays at a 3% discount. ING’s 750 staff and 1.5m customers will transfer directly to Barclays.

The deal, subject to regulatory approval, is expected to be finalised in Q2 2013.

When ING announced plans to exit the UK market in August, its mortgage book had a loan to value ratio of 50% at the end of that month.

The lender is disposing of many of its international operations as it looks to raise funds to repay a 2008 bailout from the Dutch government. It has already disposed of its online US operations and has agreed to sell its Candian operations to Bank of Nova Scotia.

According to CML figures, Barclays was the third biggest mortgage lender in 2011 with gross lending of £17.1bn. ING Direct’s gross mortgage lending last year was £3bn.

The combined Barclays/ING mortgage lending would see the bank remain behind Lloyds Banking Group and Santander as the third biggest mortgage lender.

Barclays says it will continue to use ING Direct UK’s operations and platforms to service existing customers. The bank expects customers to receive equivalent terms and conditions when the switch to Barclays is complete.

Ashok Vaswani, chief executive of Barclays UK Retail and Business Banking, said: “We will be delighted to welcome ING Direct UK customers to Barclays.

“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.”

David Hollingworth, head of communications, at brokerage London and Country told Mortgage Solutions: “This is something that has been expected. ING has taken its foot off and on the gas over the past year and you could see something like this happening. But it’s a shame another lending brand has disappeared from the market.

“ING were around for a while as a direct proposition but really threw themselves into the intermediated market.

“But it is a good move from Barclays. I think the savings will be very attractive to them and the mortgage book is clearly high quality, prime, low LTV loans.”

Ben Thompson, MD of the Legal & General Mortgage Club, said: “ING Direct has provided some much needed new lending into the UK mortgage market over the last few years.

“At times its pricing was so strong it caused some healthy competition which will have benefitted many fortunate borrowers.

“However Barclays has also provided some excellent new lending into the UK mortgage market and through the downturn has become one of the top players in this sector.

“The hope has to be that this transaction will bring about more benefits for borrowers and the industry as a whole – the market and consumers need more competition and mortgage availability.”

Mark Harris, chief executive of SPF Private Clients, added: “Woolwich has led the way in the mortgage market for a number of years with product innovation, service and pricing.

“ING is a relatively new lender, but like Woolwich has made a good impression and the acquisition creates a more powerful mortgage offering.

“Critics may point to more power to one of the big boys in the market and less consumer choice but there remain plenty of other lenders out there in what is still an under-supplied market.”

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