Large supermarket bank with over five million customers SOLD to Barclays
A MAJOR supermarket bank has been sold to Barclays, in a move that will affect more than five million customers.
The major bank has agreed to acquire Tesco Bank's retail banking division, including the acquisition of around 2,800 staff, it has announced.
It follows that Tesco was exploring the future of its banking arm and that HSBC had made an indicative offer for the company.
The measure will affect millions of credit cards, loans and savings customers.
Although these services will be operated by Barclays, they will continue under the Tesco Bank name.
In addition, Tesco Bank will retain some of its banking activities, including insurance, ATMs, travel money and gift cards.
The retailer said customers do not need to take any action and will contact them in the coming months.
No current timeline has been released for how long the changes will last.
Ken Murphy, CEO of Tesco Group, said: “Tesco Bank is a strong business that has been helping millions of loyal customers manage their money for more than 25 years.
“As we look to the future, our aim is to be the best financial services provider in the UK, and this strategic transaction and partnership with Barclays will deliver greater value for customers and for our business.”
Tesco Bank offers a range of personal banking and insurance products, including personal loans, credit cards, car insurance and pet insurance.
Barclays expects to pay around £600 million for Tesco Bank's credit cards, unsecured personal loans, deposits and operating systems.
Tesco Bank employees will also move to Barclays over time.
The lender stopped offering mortgages through its bank in 2019 after seven years.
The 23,000 mortgage loans were sold to Lloyds Banking Group, of which Halifax is part, for around £3.8 billion.
It comes after Sainsbury's announced it will wind down its banking division, known as Sainsbury's Bank, as part of plans to focus on retail.
Last summer, Sainsbury's Bank transferred its £479 million mortgage portfolio to Co-op Bank.
Elsewhere, struggling Metro Bank announced it would cut 800 jobs and overhaul opening hours in a new cost-cutting drive.
The major bank is considering cutting seven-day branch opening hours as it tries to recover costs.
It comes after a difficult time for Britain's banks.
The latest announcements mean that more than 190 branches will close so far this year as banks look to distance themselves from the high street.
Data from the UK's largest ATM network, LINK, tracks planned branch closures across the UK.
Several major lenders have been affected, including Barclays, Lloyds and the Bank of Scotland.
Customers are increasingly turning to online banking to manage their finances, as banks and building societies look for ways to cut costs.
In the meantime, here's the full list of bank branches closing in 2024, including Lloyds and Barclays.
What the sale of Tesco Bank could mean for your money
As with other UK banks, Tesco Bank customers are protected by the Financial Services Compensation Scheme (FSCS), meaning up to £85,000 per person is protected if the bank goes bust.
A sale will be closely monitored by the banking regulator.
In the short term, customers likely won't notice much change.
When Co-op Bank put itself up for sale in 2017, there was no immediate impact on its products and services.
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