UK bank Barclays has agreed to buy Standard Life Bank, the mortgage and savings arm of the Scottish insurer, for £226 million (€248 million), a price well below analysts’ expectations.

The cash purchase will include a savings book of about £5.5 billion and almost 80,000 mortgages totalling £8.8 billion.

Standard Life, which launched its banking business 11 years ago, has focused on providing loans to good-quality borrowers. Its average loan-to-value ratio is 48 per cent, marginally higher than Barclays’ 44 per cent.

Analysts had initially put a value of £300 million to £400 million on the business. – (Copyright The Financial Times Limited 2009)