Barclays Bank UK has agreed to acquire Tesco Bank’s retail banking business for £600 million, The banking giant will snap up its credit cards, unsecured personal loans, savings and banking operations as part of the deal.
Additionally, Barclays UK will enter a long-term partnership with Tesco Stores Limited 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 Tesco customers.
The acquired customer base will complement Barclays UK’s current business, as well as build on the existing strategic partnerships with other leading retail, consumer electronics and loyalty programme brands.
The transaction involves the acquisition of approximately £8.3 billion of unsecured lending balances with a credit quality consistent with our existing UK portfolios.
The business being acquired includes approximately 2,800 employees, encompasses technology and operational infrastructure, and made an adjusted operating profit of approximately £85 million in the 12 months ended February 20231.
Barclays UK intends to integrate the business into its operational infrastructure over time.
CS Venkatakrishnan, Group Chief Executive of Barclays, said, “Like our acquisition of Kensington Mortgages last year, this partnership with Tesco is a further demonstration of the investment we continue to make in our UK consumer business. We are looking forward to working closely with the team at Tesco over the coming months to enable a smooth transition and, subject to completion of the transaction, we look forward to welcoming Tesco Bank colleagues and customers to Barclays.”
Ken Murphy, Group Chief Executive of Tesco, 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, we aim 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. I am hugely grateful to Tesco Bank colleagues for their dedication and excellent service to our customers, and I’m confident that this new partnership approach will build on that success.”