Tesco is selling its retail banking operations to Barclays for £700m. The deal will see Barclays take over Tesco Bank’s credit cards, loans, and savings accounts, as well as market Tesco-branded banking services. Approximately 2,800 of Tesco’s banking staff will switch to Barclays as part of the acquisition. Some of Tesco Bank’s services, including insurance, ATMs, travel money, and gift cards, will remain with the supermarket group, and Barclays will distribute credit cards, unsecured personal loans, and deposits using the Tesco brand.
Tesco customers will not need to take any action, and the supermarket chain will contact them in the coming months. As part of the deal, Tesco will receive £600m immediately and a further £100m in cash after the settlement of certain regulatory capital amounts and transaction costs. Barclays will integrate the business over time, and the bank will reportedly work with Tesco to support staff facing transfer to Barclays.
Barclays Group CEO, CS Venkatakrishnan, described the deal as a “strategic relationship with the UK’s largest retailer.” He added he was keen to leverage the bank’s expertise in partnership cards to improve the highly successful Tesco Clubcard loyalty scheme. The partnership between Tesco and Barclays is expected to last for at least ten years.
The sale of Tesco Bank’s retail banking operations represents the latest in a series of changes to Tesco’s business following the appointment of Ken Murphy as CEO in October 2020. Earlier this year, the supermarket group pledged to reach net-zero carbon emissions by 2035. It has also opened a number of convenience stores and testing a delivery service using drones
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