Tesco, a leading UK-based supermarket chain with an extensive digital and physical retail footprint, has confirmed the sale of its banking operations to Barclays in a deal valued at £700m.
The deal was finalised alongside a new exclusive 10-year partnership aimed at enhancing Tesco-branded banking services, according to FF News.
The acquisition enables Barclays to expand its UK footprint while leveraging Tesco’s strong retail brand. The agreement includes a strategic partnership where Barclays will develop new and innovative financial products under the Tesco Bank brand, combining Tesco’s customer-focused ethos with Barclays’ financial expertise.
Tesco Bank, a subsidiary of Tesco, has been providing financial services for over 25 years.] The sale does not affect Tesco’s existing insurance and money services, such as ATMs, travel money, and gift cards. These remain part of Tesco’s portfolio as profitable, capital-light businesses closely tied to its core retail operations.
On 17 October 2024, the High Court of Justice of England and Wales approved Tesco’s banking business transfer scheme under Part VII of the Financial Services and Markets Act 2000. The transfer of Tesco Personal Finance PLC to Barclays Bank UK PLC became effective on 1 November 2024.
With the proceeds from the sale, Tesco plans to return £700m to shareholders via a share buyback programme. This initiative is set to begin once the final tranche of Tesco’s ongoing £1bn buyback programme concludes.
Ken Murphy, group CEO of Tesco, said, “We are delighted to be working alongside Barclays to unlock even greater value for Tesco Bank customers. Through our strategic partnership, customers will have access to new and innovative propositions, while continuing to enjoy the unique benefits of Tesco Clubcard. This is a significant moment for all our colleagues at Tesco Bank and I want to say a heartfelt thank you for all their hard work, helping millions of loyal customers to manage their money for more than 25 years. Their dedication is relentless and I know that this new partnership with Barclays will only build on their success.”
C.S. Venkatakrishnan, group CEO of Barclays, commented, “This acquisition is an important step in increasing our investment in the UK. We look forward to collaborating with Tesco Group on delivering Tesco-branded financial services. We are delighted to welcome all transferring Tesco Bank employees and customers to Barclays.”
Vim Maru, chief executive of Barclays UK, added, “Today marks a significant step as we continue to grow Barclays UK. We will bring the strength of both businesses together, benefitting customers and colleagues. I am excited that the combination of our brands, alongside the benefits of Clubcard and its loyalty scheme, will support millions of households across the UK with their financial needs.”
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