Released: 26/10/2009
com:20091026:RnsZ3795B
.
RNS Number : 3795B
Standard Life plc
26 October 2009
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
Standard Life plc
26 October 2009
SALE OF STANDARD LIFE BANK TO BARCLAYS AND STRATEGIC AGREEMENT BETWEEN STANDARD
LIFE AND BARCLAYS UK RETAIL BANKING
Highlights
- Standard Life plc to sell Standard Life Bank plc to
Barclays Bank PLC.
- Cash proceeds of at least £226million.
- Standard Life plc and Barclays UK Retail Banking agree
heads of terms to enter into a strategic agreement.
Standard Life plc ("Standard Life") today announces it has entered into an
agreement with Barclays Bank PLC ("Barclays"), to sell Standard Life Bank plc
("Standard Life Bank"), its UK mortgage and savings business. The consideration
of at least £226 million is payable in cash upon completion, subject to
adjustment based on changes to Standard Life Bank's tangible net assets at
completion.
As previously announced, Standard Life has limited the lending activity of
Standard Life Bank during the recent economic downturn. Standard Life no longer
sees growing the volume of lending activity as being consistent with the
long-term financial objectives of the group. The transaction is therefore in
the best interests of the group, its shareholders and its customers.
Separately, Standard Life and Barclays UK Retail Banking have agreed heads of
terms to enter into a strategic agreement to explore joint opportunities in the
UK retail long-term savings and investments sector. The initial focus is
expected to be on the development of a simplified pension product. Thereafter,
both parties will continue to explore and develop further opportunities in this
market.
Commenting on the transaction, Sir Sandy Crombie, Group Chief Executive of
Standard Life said:
"Since its launch in 1998 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. 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 and will result in
significant potential for future value creation for both parties.
"Barclays is an attractive partner for Standard Life, and also provides
continuing security for the existing depositors and bondholders of Standard Life
Bank. We look forward to working with Barclays to shape this strategic agreement
and explore new market opportunities."
Standard Life Bank is Standard Life's wholly owned UK mortgage and savings
subsidiary, with outstanding mortgage loans of £8.8 billion and customer
deposits of £5.5 billion at 30 June 2009. For the year ended 31 December 2008,
Standard Life Bank reported IFRS underlying profit before tax of £26 million.
(Note 1)
On completion of the transaction, the 268 employees who support Standard Life's
UK mortgage and savings business will transfer to Barclays, in accordance with
TUPE (Note 2) transfer regulations.
The sale will result in a reduction of group tangible shareholders' equity of
approximately £40 million on completion. The cash proceeds will be retained for
general corporate purposes and Standard Life's regulatory capital surplus will
remain strong at approximately £3.1 billion (Note 3).
The transaction is subject to certain conditions, including regulatory approval,
and is expected to complete in January 2010.
BofA Merrill Lynch is acting as sole financial adviser to Standard Life in
connection with the transaction. BofA Merrill Lynch and UBS are acting as joint
corporate brokers.
-ENDS-
Enquiries:
Standard Life
Media
Barry Cameron Nicola McGowan
+44 (0)131 245 6165 +44 (0)131 245 4016
Institutional Equity Investors Gordon Aitken
+44 (0)131 245 6799 Duncan Heath
+44 (0)131 245 4742
Debt Investors
Andy Townsend
+44 (0)131 245 7260 Alan Coutts
+44 (0)131 245 0201
BofA Merrill Lynch
Henrietta Baldock Anna Shiel
+44 (0)207628 1000 +44 (0)207628 1000
UBS
Tim Waddell Anna Swire
+44 (0)207567 8000 +44 (0)207567 8000
Barclays
Media
Alistair Smith Phillippa-Jane Vermoter
+44 (0)207116 6132 +44 (0)207116 7226
Investor Relations
James Johnson Neil Temple
+44 (0)207116 7233 +44 (0)207116 2928
Note 1 - Per Standard Life Group Annual Report and Accounts 2008
Note 2 - Transfer of Undertakings (Protection of Employment) Regulations 2006
Note 3 - As at 30 June 2009
Notes to editors:
1. It is anticipated that there will be no impact on customer
terms and conditions and level of service.
2. The reduction in tangible shareholders' equity to the group
of approximately £40 million is based on the estimated net
assets of Standard Life Bank as we would expect them to be
reflected on a Group consolidated basis at 31 August 2009 (30
June 2009: actual unaudited net assets of £261 million). The
reduction in tangible shareholders' equity excludes
transaction costs.
3. Standard Life is principally involved in the provision of
life assurance and pensions, investment management and
healthcare insurance.
4. Standard Life has approximately 6.5 million customers
worldwide and provides an extensive range of products and
services, aimed at meeting the financial requirements of
customers throughout their lives.
5. In the first half of 2009, Standard Life reported Worldwide
life and pensions new business sales of £7,451 million, with
UK life and pensions new business sales of £5,246
million(Note 1). EEV operating profit for the first half of
2009 was £243 million. Group embedded value was £5,859
million at 30 June 2009 and FGD surplus was £3.1 billion.
6. 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 an extensive international presence
in Europe, the USA, Africa and Asia. With over 300 years of
history and expertise in banking, Barclays operates in over
50 countries and employs over 145,000 people. Barclays moves,
lends, invests and protects money for over 49 million
customers and clients worldwide.
7. Merrill Lynch International ("BofA Merrill Lynch"), a
subsidiary of Bank of America Corporation, is acting
exclusively for Standard Life in connection with the
transaction and for no one else and will not be responsible
to anyone other than Standard Life for providing the
protections afforded to its clients or for providing advice
in relation to the transaction or the contents of this
announcement.
Note 1 - New business sales are measured on a Present Value of New Business
Premium (PVNBP) basis.
This information is provided by RNS
The company news service from the London Stock Exchange
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