Barclays Acquires Tesco Bank’s Savings, Loans, And Credit Cards Operations

Barclays has announced the acquisition of Tesco Bank’s savings, loans, and credit cards operations. The £600 million agreement has an initial deal lasting 10 years. The deal sees about 2,800 Tesco Bank workers operating on banking products will be transferred to Barclays. As per the key facts page of Tesco Bank, 3,540 are currently working for their banking wing.

As part of the agreement, Tesco-branded services and products won’t be changed and Tesco will get an annual revenue for the utilization of its brand.

This Collaboration Aims To Strengthen Tesco’s Balance Sheet

Tesco announced that the contract removes £6.7 billion of financial burdens and £7.7 billion of capital-intensive assets from their balance sheet

Adding to the £600 million, the supermarket is expecting to see an additional £100 million in net cash following the payment of transaction costs and some regulatory capital amounts. Tesco will still keep other remaining activities such as gift cards, travel money, ATMs, and insurance.

The chief executive of Tesco group, Ken Murphy stated that this transaction will greatly reduce Tesco’s financial liabilities. It will strengthen its balance sheet, allowing the company to concentrate on growing its essential retail business. He expressed gratitude towards Tesco’s colleagues for their commitment and exceptional service to clients. He further stated that he believes this new collaborative approach will contribute to the success of the company.

The agreement is conditional on regulatory approval and court sanction or lack of objection, with the expected completion in the second part of 2024.

The Barclays Group Chief Executive Officer, Coimbatore Sundararajan Venkatakrishnan, expressed that the team is looking forward to collaborating closely with Tesco’s team in the upcoming months to enable a seamless transition.

Subject to completion of the transaction, the team eagerly awaits to welcome Tesco Bank customers and colleagues to Barclays.

Tesco Bank Collaborates With Royal Bank Of Scotland To Enhance Its Banking Operation

Tesco Personal Finance plc, also known as Tesco Bank, is a British commerce bank established in July 1997 (as Tesco Personal Finance). The bank emerges from a 50:50 collaboration between Tesco, the leading supermarket in the UK with 2,800 employees, and the Royal Bank of Scotland.

Tesco later acquired the shareholding of Royal Bank, which resulted in Tesco Bank becoming a fully owned subsidiary, and now works under the Financial Service Compensation Scheme within its banking license. The bank provides a range of travel products, mortgages, savings, loans, credit cards, and insurance. Tesco Bank also introduced a current account in June 2014 but has ceased new applications for current accounts, and all accounts currently existing were closed in November 2021.