Tesco has successfully concluded the sale of its banking arm, marking the beginning of a significant 10-year partnership with Barclays.
This exclusive collaboration will enable customers to access Tesco-branded banking products and services, leveraging Tesco’s expansive brand presence alongside Barclays’ prowess in financial services. The alliance aims to craft new and innovative products under Tesco’s bank brand, further enhancing customer experience.
The High Court of Justice of England and Wales gave the green light to Tesco’s banking business transfer scheme application on 17 October. Consequently, as of 1 November, the ownership of these operations has officially transferred to Barclays.
Tesco will maintain its current insurance and money services, such as ATMs, travel money, and gift cards. These sectors are described as highly interconnected to Tesco’s primary retail offerings and remain profitable and efficient, requiring minimal capital to operate.
Following the completion of the sale, Tesco plans to return £700 million to its shareholders via a share buyback, utilising the full cash proceeds and the net cash after specific regulatory and transaction settlements. This endeavour is slated to commence after finalising the last segment of an ongoing £1 billion buyback programme.
Ken Murphy, Tesco’s Group Chief Executive, expressed gratitude to Tesco Bank’s staff for their dedication over the past 25 years and expressed optimism about the partnership with Barclays enhancing their achievements. Barclays’ Group Chief Executive, C.S. Venkatakrishnan, highlighted the acquisition as a pivotal step in their UK investment strategy, anticipating fruitful collaboration with Tesco.
The partnership between Tesco and Barclays represents a forward-thinking approach to combining retail and financial services expertise, promising substantial benefits for customers and shareholders alike.
