Barclays to acquire Tesco Bank
Barclays is to acquire the retail banking business of Tesco Bank, which includes credit cards, loans and savings.
In addition, Barclays UK will enter a long-term partnership with Tesco Stores for an initial period of ten years to market and distribute credit cards, unsecured personal loans and deposits using the Tesco brand. It will also explore other opportunities to offer financial services to the supermarket’s customers.
Tesco said Barclays will pay £600 million for the banking operations and a further £100 million after the settlement of certain regulatory capital amounts and after transaction costs.
However, the supermarket will retain all other existing activities of Tesco Bank, including insurance, ATMs, travel money and gift cards.
As part of the deal, around 2,800 Tesco Bank colleagues working on banking products, including the senior management team, will transfer to Barclays.
Tesco said the transaction will reduce its financial liabilities and strengthen its balance sheet as it looks to focus on growing its core retail business.
Ken Murphy, Tesco, chief executive, said: “Tesco Bank is a strong business that has helped millions of loyal customers to manage their money for more than 25 years. As we look to the future, our aim is to be the best provider of financial services in the UK, with this strategic transaction and partnership with Barclays unlocking greater value for customers and for our business.
“By working with one of the UK’s leading banks, we can bring customers new and innovative propositions, which will continue to benefit from Tesco Clubcard’s unique insight and digital capabilities.”