Barclays is set to purchase Tesco’s retail banking operations in a deal valued at £600m, which will see the transition of Tesco Bank’s credit card, loans, and savings accounts to Barclays.
This arrangement also includes a provision for Barclays to offer Tesco-branded banking services. As part of the agreement, approximately 2,800 Tesco banking employees will move to Barclays.
Tesco has assured its customers that they do not need to take any immediate action and that they will be contacted in the forthcoming months regarding the transition.
The supermarket will retain some of Tesco Bank’s services, such as insurance, ATMs, travel money, and gift cards, while also establishing a 10-year partnership with Barclays for the marketing and distribution of Tesco-branded credit cards, unsecured personal loans, and deposits.
Tesco’s chief executive, Ken Murphy, 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, our aim is 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.
“The transaction will also significantly reduce our financial liabilities, in turn strengthening our balance sheet and allowing us to focus on continuing to grow our core retail business. I’m hugely grateful to our colleagues for their dedication and excellent service to our customers, and I’m confident that this new partnership approach will build on that success.”
Barclays plans to integrate the acquired business into its operations over time, with Tesco Bank working closely with the supermarket to support staff during the transition. Barclays Group
Barclays chief executive, C.S. Venkatakrishnan, added: “Barclays is a leading consumer bank in the UK. This strategic relationship with the UK’s largest retailer will help create new distribution channels for our unsecured lending and deposit businesses. We are able to bring our expertise in partnership cards developed over decades in the US to enhance further the highly successful Tesco Clubcard loyalty scheme.
“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.”
