Barclays agreed yesterday to buy the banking business of Edinburgh-based insurer Standard Life for at least £226million.
The news follows speculation last month that a sale was on the way.
The banking giant has about 15million retail banking customers in the UK.
It will take on a further 350,000 through the deal along with Standard Life’s £5.5billion savings book.
Frits Seegers, chief executive of Barclays’ retail and commercial-banking business, said: “This transaction brings to Barclays high-quality savings and mortgage books, and an attractive customer base.”
Standard Life Bank, which was launched in 1998, has no branches and made an underlying pre-tax profits of £26million last year.
It has an affluent savings base of 287,000 accounts with an average deposit of more than £19,000.
The business also has an £8.8billion loan book and 78,000 mortgage accounts, although the bank has limited its lending activity during the current downturn.
The banking arm is no longer part of the insurer’s long-term plans for the business, but Standard Life and Barclays have also agreed to explore joint opportunities in UK retail savings and investments, beginning with the development of a simplified pension product.
Standard Life chief executive Sir Sandy Crombie said: “We no longer believe that increasing the lending activity of the bank is consistent with our long-term financial objectives.
“The transaction we have agreed with Barclays, along with the strategic agreement we have also announced today, supports our plan for growth as an asset-managing business.”
About 270 staff will transfer to Barclays when the deal completes early next year.
Just last week, Standard Life concluded an “extensive” worldwide search for a new chief executive by naming its finance director as Sir Sandy’s successor.
David Nish will take on the top job from January 1. The group announced its search for a new CEO in March, a month after Sir Sandy turned 60 and following widespread speculation over his retirement plans.