Barclays to Buy Regions Subprime Unit for $225 million

Barclays Bank PLC ("Barclays") announces that it has entered into an agreement to purchase EquiFirst Corporation, the non-prime mortgage origination business of Regions Financial Corporation ("Regions"), for a consideration of approximately US$225 million (115 million pounds Sterling). Completion is expected in the first half of 2007, subject to the receipt of the required licenses and applicable regulatory approval. In the third year of ownership, Barclays expects to achieve an annual after-tax return on this investment in excess of 20%. Barclays will finance the transaction out of existing cash resources.

EquiFirst is the 12th largest non-prime wholesale mortgage originator in the United States. It originates its loans through over 9,000 brokers in 47 states. It will be combined with Barclays mortgage servicing and capital markets capabilities to create a vertically integrated mortgage franchise. Barclays believes that a vertically integrated mortgage franchise can deliver significant synergies through linking our established capital markets business with servicing and origination capabilities.

Barclays Capital currently has an active wholesale loan mortgage business in the US which involves the purchase and securitization of mortgages on a principal basis. All the loans originated by EquiFirst are expected to be securitized or sold on an ongoing basis after an average hold period of approximately 2 to 3 months. This acquisition builds on the recent purchase of HomEq, a mortgage servicing platform, acquired by Barclays in November 2006.

Grant Kvalheim, Co-President of Barclays Capital, commented, "I am delighted to acquire such a strong management team within EquiFirst and we welcome the EquiFirst staff to Barclays Capital. This acquisition offers Barclays Capital an excellent opportunity to further vertically integrate and expand our existing US mortgage business."

Dowd Ritter, President and CEO of Regions Financial (NYSE: RF), said, "This sale is the result of a tighter focus on our strategic priorities. Regions is concentrating on customer relationships and core businesses in our 16-state footprint. We operate in very attractive markets in the South, Midwest and Texas and believe they represent the greatest potential for success."

Jeff Tennyson, CEO of EquiFirst, said, "Regions’ ownership of EquiFirst over the last 8 years has allowed us to build a premier mortgage lender in the non-prime industry. Barclays Capital is a leading international investment bank that will strengthen our position as an industry leader and greatly enhance our access to the global capital markets. The sale of EquiFirst to Barclays Capital is a clear positive event for all stakeholders."