“Barclays new chief executive set the course firmly towards retail banking on Tuesday,” says Steve Slater on Reuters.com. That’s when the bank’s takeover of Dutch bank ING’s British savings and lending business, due to be completed by April 2013, was announced.
Barclays will take on the 750 staff, £10.9bn of deposits and £5.6bn of mortgages of the British business, as ING seeks to raise funds to repay Dutch state aid in the wake of the banking crisis. The deal will add around 1.5 million customers to Barclays existing roster of around 15 million. So what does all this mean for customers of ING?
The first known change for savers, as Melanie Wright points out on Moneysupermarket.com, is in the safety net provided. Barclays plans to integrate ING customers into its existing retail business, which means they will qualify for full UK Financial Services Compensation Scheme (FSCS) protection of £85,000 per account holder should the bank fail.
That’s administratively easier to claim from than the Dutch Investor Compensation Scheme that currently applies to ING customers. However, should Barclays decide to run both operations under the same banking licence, then anyone with money in separate Barclays and ING accounts will need to ensure the account total doesn’t breach £85,000.
As for the all-important savings rates on deposits the advice is: be vigilant. ING has often hovered near the top of the savings tables and its current easy access account is no exception – it offers 2.7% gross (including a 2.17% bonus for the first year). Barclays, on the other hand, offers 1.26% on its e-savings Reward account, as long as you make no withdrawals. Barclays is unlikely to change ING account terms soon, but be ready to switch further down the line as previous ING ‘best buys’ dry up.
For most ING mortgage holders, the takeover is neutral in the short term; you will carry on paying off your loan as before on whatever terms you have agreed. The two banks also have similar standard variable rates. Further out, the deal could help you as Barclays is a much bigger player in the UK mortgage market, and its subsidiary, the Woolwich, in particular, offers good deals.
So look out for opportunities to switch in the future. ING will be sending out letters to all those affected in the next few weeks, so double check the bank has your correct address details.