Barclays Bank Plc, Britain's third largest bank, today said it will buy the banking operations of global asset manager Standard Life Plc, for £226 million in cash, to expand its UK savings and mortgage operations.

Under the terms, Barclays will gain deposits worth approximately £5.5 billion through Standard Life Bank's 287,000 savings accounts, and a mortgage book of outstanding balances of approximately £8.8 billion in 78,000 mortgage accounts, with an average indexed loan to value ratio of 48 per cent, as at the end of June 2009.

The price-tag is based on an estimated tangible net book value of £293 million, subject to adjustments. Standard Life Bank reported a profit before tax of £15 million for the half year ended June 2009.

The transaction is expected to close in the first quarter of 2010, subject to customary and regulatory approvals.

About 270 Standard Life Bank employees will be transferred to Barclays as part of the deal.

London-based Barclays is a major global financial services provider engaged in retail and commercial banking, credit cards, investment banking, wealth management and investment management services, with extensive presence in Europe, US, Africa and Asia, operating in 50 countries and employing over 145,000 people.

As at 30 June 2009, Barclays UK Retail Banking had approximately 13 million savings accounts and total customer deposit balances of £88.5 billion. The number of mortgage accounts stood at 824,000, with a book of £84.4 billion and average loan to value ratio of 44 percent.

Barclays Global Retail and Commercial Banking chief executive, Frits Seegers said, ''The acquisition of Standard Life Bank is a good fit with Barclays existing UK retail banking business. This transaction brings to Barclays high-quality savings and mortgage books, and an attractive customer base. We also look forward to working together with Standard Life in the long-term savings and investments sector.''

Barclays and Standard Life have also agreed to explore joint opportunities in the UK retail long-term savings and investments sector, starting with a multi-channel, simplified pension product, the statement said.

Standard Life chief executive Sandy Crombie said, "Since its launch, Standard Life Bank has grown steadily but we no longer believe that increasing the lending activity of the bank is consistent with our long-term financial objectives."

Edinburgh-based Standard Life is a global asset manager providing life assurance and pensions, investment management, banking and health insurance products to over 6.5 million customers. The group has presence in several countries in Europe, North America, and Asia and employs around 10,000 people. Its total assets stood at approximately £156.5 billion as at the end of June 2009.

Shares of Barclays dropped 2.5 per cent to 356.2 pence yesterday on London Stock Exchange, while Standard Life closed at 226.9 pence, down 1.5 per cent.