British bank Barclays has snapped up ING Direct's UK operations as banks increasingly eye online distribution.
Barclays, which in February nabbed former Advantedge head Steve Weston as managing director of mortgages, said it would buy ING Direct UK's mortgage book at a 3% discount, while its deposit book would be transferred at par value.
According to the Financial Times
, analysts have praised the move as positive for both banks, with ING
Direct continuing to deleverage following the GFC and Barclays expanding its retail presence through the direct channel.
The move comes as banks increasingly eye the online direct channel. MPA Top 100 Broker Warren Dworcan told Australian Broker he foresees potential channel conflict as Australian banks expand their online retail presence.
"A couple of lenders are taking reasonably bold moves to transact with home loans online. That’s a sign that banks are potentially looking at alternative channels," Dworcan said.
"My personal belief is that the online space is good, but it’s good to give consumers the ability to research and then speak to someone to see what’s on offer and build a relationship with them," he added.
Direct had previously flagged the possible sale of its UK and Canadian businesses which, like its Australian operations, rely on a branchless distribution model. The sale of its UK division to Barclays will generate a €320m loss for the company. ING
Direct contended that the sale of its UK business did not reflect upon its operations in other countries, including Australia.
Direct units in Australia, Austria, France, Germany, Italy and Spain are not affected by today’s announcement. ING
continues to invest to evolve the ING
Direct business model, increasing the product offering and extending distribution, while integrating the balance sheet with the rest of ING
Bank, the ING
Group said in a statement.