Barclays gets some new bankING customers
Our good friend Barclays Bank has just bought some new customers. Not in the same way that they (allegedly) bought the LIBOR rate, rather instead they have bought the savings and mortgage business of Dutch bank ING.
Announced last night, the deal will see £10.9 billion (€13.4bn) of savings deposits and £5.6 billion of mortgages (€6.9bn) of ING Direct UK transferred to Barclays, who will eventually integrate these businesses in its UK Retail and Business Banking division.
"ING Direct UK operated in a very competitive market over the past years and I am proud of the excellent customer experience our UK team has built, as proven by the customer satisfaction scores. In Barclays we have found a company who will continue to provide the excellent service our approximately 1.5 million ING Direct customers in the UK have grown accustomed to," said Jan Hommen, CEO of ING, a clearly much mistaken man. In the latest FSA figures, Barclays was third in the “most customer complaints” category, with 280,358 complaints opened in the first six months of the year.
But other than a potential cliff-drop of customer service, what else does this mean for ex-ING customers? ING launched ING Direct in 2003 with market-leading online savings deals, an area Barclays don’t much bother to compete in. While ING customers are guaranteed to keep current rates on transfer, it may be that rates fall over time as the business is integrated within Barclays own offering. However, since taking over Woolwich in 2000, Barclays mortgage offerings have been increasingly competitive, in line with the old Woolwich brand, so savers may yet find Barclays end up as a more attractive provider. Examples of current comparison rates, provided by Moneysupermarket.com are shown below.
Either way, there is nothing individual account holders can do to stymie the deal, unless they also happen to be significant shareholders in either company. Account holders will migrate to the Barclays when the deal completes next year, but any change in rates should be checked to see whether the deal is still competitive. And if not,do something about it.
One other point to mention is that once ING savings come under the Barclays umbrella, it is likely the savings protection will be covered by the FSCS under Barclays licence. This will mean you only get one lots of savings protection for any accounts held with either Barclays or ING, so if you have more than £85,000 in savings, what the hell are you reading Bitterwallet for?