The UK's Barclays Bank is disbanding a mortgage processing joint venture it established with Countrywide Financial of the US and bringing the operations back in-house.
Barclays is pulling out of the JV, called Global Home Loans Limited (GHL), and selling its 30% stake to Countrywide Financial for an undisclosed amount.
The UK bank says it will bring its mortgage processing operations - including 1600 jobs - back in-house at the end of an existing contract with GHL which expires in April 2006.
Under the terms of the agreement Barclays will license GHL's processing technology for three years.
Mike Rogers, managing director, UK retail banking, Barclays, says further growth of the UK residential mortgage business is a strategic priority for the retail bank, which is investing heavily to deliver imrpoved products and servicing to customers.
"In support of this we have made a strategic decision to take direct control of our mortgage operations from product development through to sales, processing and beyond," says Rogers.
The bank has identified mortgage sales as a key underperforming business area. It recently appointed Mark Parsons, former head of financial services at PwC as its new managing director of home finance following the departure earlier this year of Jayne Almond.
Barclays believes that by bringing the technology inhouse it will be able to build links to other internal customer databases and cross-sell products more effectively.