Pending regulatory approval expected by the second quarter of next year, the deal gives Barclays £10.9 billion ($17.5 billion) worth of deposits and £5.6 billion in outstanding mortgage balances, according to the announcement. ING Direct is selling the mortgage assets at a 3 percent discount, or about £260 million. The deposits are being acquired at cost.
Barclays' head of UK retail and business banking, Ashok Vaswani, said Barclays would honor ING Direct U.K.’s current terms and conditions affecting about 1.5 million customers. The company is also taking on about 750 of ING Direct’s U.K.-based employees.
The deal is part of Barclays' previously announced efforts to steer itself away from investment banking.
In August, the bank’s head of retail banking, Antony Jenkins, a 50-year-old British executive who has spent most of the past 28 years at Barclays, replaced Bob Diamond, 61, who stepped down in July following the Libor interest rate manipulation scandal.
ING is also currently offering its Asian investment and insurance operations for sale, hoping it will raise $7 billion. Last year it sold ING Direct USA to Capital One Financial Corp. (NYSE: COF) for $9 billion in cash and stock. In August, the bank sold its Canadian online bank for $3.1 billion.
In 2008, the bank received €10 billion in aid from the Dutch government to strengthen the bank’s capital position amid the Eurozone’s financial crisis.
Barclays shares rose about 1 percent to £224.45 in London.
ING Groep N.V.’s ADR was trading down 1.3 percent to $8.35 in pre-market trading in New York.