Barclays is expected to complete its acquisition of Standard Life Bank in the first quarter of 2010.

Barclays Bank has agreed to purchase the banking arm of Standard Life plc for £226 million, which it will pay in cash upon completion.

The economic downturn forced Standard Life to limit its lending activity and as such has forced the Bank to re-evaluate the long-term objectives of the Group. In a statement announcing the sale, it said that the “transaction is in the best interests of the group, its shareholders and its customers.”

However, after reporting a relatively healthy profit at the end of 2008 and again for the first six months of 2009 of £26m and £15m respectively, Barclays has viewed the purchase as an attractive proposition.

It will take with it a savings book of approximately £5.5 billion and a mortgage book with outstanding balances of approximately £8.8bn, both as at 30 June 2009, with an average indexed loan to value ratio of 48%.

Sir Sandy Crombie, Group Chief Executive, commented: “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.”

Frits Seegers, Chief Executive of Barclays Global Retail and Commercial Banking, said: “The acquisition of Standard Life Bank is a good fit with Barclays’ existing UK retail banking business. This transaction brings to Barclays high-quality savings and mortgage books, and an attractive customer base.”

All 268 employees of Standard Life Bank will transfer to Barclays.