Skip Header
Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

Tesco sells most of banking unit to Barclays for £600m

(Sharecast News) - UK supermarket giant Tesco has sold its most of its retail banking business to Barclays for £600m, the two companies said on Friday. The deal will see Tesco sell its existing banking operations in credit cards, loans and savings, removing £7.7bn of capital-intensive assets and £6.7bn of liabilities from its balance sheet. About 2,800 Tesco workers will transfer to Barclays.

Tesco said it expected to rake in a further £100m after the settlement of regulatory capital amounts and transaction costs. Combined with the £250m special dividend paid by Tesco Bank last August, this is expected to result in a total of around £1bn, the majority of which will be returned to shareholders in the form of an incremental share buyback.

The duo also agreed a 10-year partnership to market and distribute credit cards, unsecured personal loans and deposits using the Tesco brand, as well as explore other opportunities to offer financial services to Tesco customers.

Tesco will keep insurance, ATM, travel money and gift card operations. Combined, the pro forma annual adjusted operating profit from the partnership and retained activities is anticipated to be £80m - 100m - more than half of the current year expected profits from Tesco Bank.

Reporting by Frank Prenesti for

Share this article

Related Sharecast Articles

Eli Lilly weight-loss drug 'significantly' reduces sleep apnoea
(Sharecast News) - Eli Lily's weight-loss drug tirzepatide has been shown to "significantly" reduce sleep apnoea severity, the US drugs giant said on Wednesday.
Royal Mail-owner rebuffs takeover approach
(Sharecast News) - Shares in International Distribution Services soared on Wednesday, after it emerged that Czech billionaire Daniel Kretinsky had made a takeover approach for the Royal Mail owner.
Just Eat shares drop as Q1 orders disappoint
(Sharecast News) - Shares in Just Eat dropped sharply on Wednesday after the food delivery marketplace delivered underwhelming order numbers for the first quarter, though revenue growth picked up sharply in the UK and Ireland.
Tekcapital's Innovative Eyewear inks deal with US firm
(Sharecast News) - Intellectual property investor Tekcapital announced a fresh development from its portfolio company Innovative Eyewear on Wednesday, as the latter launched a strategic partnership with Windsor Eyes, a prominent eyewear manufacturing and distribution firm.

Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

Award-winning online share dealing

Search, compare and select from thousands of shares.

Expert insights into investing your money

Our team of experts explore the world of share dealing.