Intelligent Finance (IF), the online arm of HBOS, Britain’s biggest mortgage lender, is to stop offering current accounts, credit cards, personal loans and some mortgage deals from next month as part of a shake-up of the banking group that will cost more than 400 jobs.

The Mortgage Business, the specialist buy-to-let and self-certified lender owned by the group, will close. Its customers will be transferred to Birming-ham Midshires, the mortgage lender, which is also owned by HBOS. The plans were revealed a week after the bank reported a 51 per cent fall in pretax profits to £1.4 billion in the first six months of the year.

HBOS also plans to cut its mortgage staff, including IT and product design teams. It is understood that it will also close one of its mortgage processing centres, affecting jobs in Chester, Cardiff and Livingston, Scotland, while IT jobs are to be cut in Edin-burgh, Chester and West Yorkshire.

Graham Goddard, of Unite, the union, said: “This is a further blow for jobs in the UK financial services sector being brought about by the credit crunch and changing economic climate. Our priority is to do our best to ensure these losses are dealt with through voluntary redundancy.”

From next month, Intelligent Finance will offer only offset mortgages, where customers can offset the value of their savings against their outstanding home loan debt. All standalone mortgages will be withdrawn.

HBOS said that customers who have a loan, current account, standard mortgage or credit card with IF would not be affected, but it did not rule out moving customers to Halifax or Bank of Scotland in the future. Nigel Stock-ton, managing director of HBOS mortgage intermediaries, said that Intelligent Finance intended to become a bigger operator in the savings market.

Separately, National Savings & Investments, the government-backed bank, said that since the run on Northern Rock it had received an extra £1.2 billion in investments from savers looking for a safe home for their cash.

NS&I offers a 100 per cent guarantee on all deposits. Net sales rose to £13.8 billion in the year to March, up from £12.6 billion in the previous 12 months, it said.

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