Under the terms of the deal, Barclays will acquire Standard Life Bank and approximately £5.5bn of assets from June 30.
Standard Life Bank, which was launched in 1998, has no branches and made an underlying pre-tax profit of £26m last year.
The banking arm is considered to be 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, supports our plan for growth as an asset managing business.”
Around 270 staff will transfer to Barclays when the deal completes early next year.
The bank has a savings base of 287,000 accounts with an average deposit of more than £19,000.
The business also has an £8.8bn loan book and 78,000 mortgage accounts, although the bank has limited its lending activity during the current downturn.
“The acquisition of Standard Life Bank is a good fit with Barclays existing UK retail banking business,” said Frits Segers, chief executive of Barclays Global Retail and Commercial Banking.
“We also look forward to working together with Standard Life in the long-term savings and investments sector,” he added.
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