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 Sharecast.com

Share this article

Related Sharecast Articles

AstraZeneca says does not comment on media reports as shares slump
(Sharecast News) - AstraZeneca said on Tuesday that it does not comment on speculative media reports, in response to a sharp drop in its share price.
Melrose Industries rallies as Citi remains 'high conviction' in the buy case
(Sharecast News) - Melrose Industries shot higher on Tuesday as Citi said it remains "high conviction" in the 'buy' case, given the trough multiple and the strong mid-term cash outlook.
Boeing workers agree pay deal, end strike
(Sharecast News) - Boeing's workforce ended a 53-day strike on Tuesday, after voting to accept a new labour agreement that included a 38% pay increase over four years and improved retirement contributions.
NatWest strikes £11bn deal to offload pension payments to Rothesay
(Sharecast News) - NatWest Group has struck what is thought to be the UK's biggest-ever deal to outsource pension payments to a specialist insurance company.

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.