$27.7 Billion Barclays Announced to Buy Tesco UK Retail Banking for $757 Million, Assets Include £6.7 Billion Deposits, £4.2 Billion Credit-Card Receivables & £4.1 Billion Unsecured Personal Loans
10th February 2024 | Hong Kong
Barclays has announced to buy Tesco UK retail banking for $757 million (£600 million), with assets including £6.7 billion deposits, £4.2 billion credit-card receivables and £4.1 billion unsecured personal loans. Barclays has a current market value of $27.7 billion (9/2/24). Barclays: “The transaction involves the acquisition of approximately £8.3 billion of unsecured lending balances with a credit quality consistent with our existing UK portfolios. The transaction as a whole is expected to offer attractive financial returns over the term of the agreements and will increase the weighting of our unsecured lending business within Barclays UK. The business being acquired includes approximately 2,800 employees, encompasses technology and operational infrastructure and made an adjusted operating profit of approximately £85 million in the 12 months ended February 20231. Barclays UK’s intention is to integrate the business into its operational infrastructure over time. If completion of the transaction were to occur at the end of July 2024, Barclays UK expects to acquire approximately £4.2 billion of gross credit card receivables and £4.1 billion of gross unsecured personal loans, together with approximately £6.7 billion in customer deposits. Tangible net assets acquired at completion of the transaction are expected to be approximately £960 million, including an expected credit loss allowance of approximately £(490) million. The consideration payable by Barclays UK at completion is expected to be approximately £600 million.” More info below:
“ $27.7 Billion Barclays Announced to Buy Tesco UK Retail Banking for $757 Million, Assets Include £6.7 Billion Deposits, £4.2 Billion Credit-Card Receivables & £4.1 Billion Unsecured Personal Loans “
C.S. Venkatakrishnan, Group Chief Executive of Barclays: “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. Similar to our acquisition of Kensington Mortgages last year, 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.”
Ken Murphy, Group Chief Executive of Tesco: “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. I’m hugely grateful to Tesco Bank colleagues for their dedication and excellent service to our customers, and I’m confident that this new partnership approach will build on that success.”
$27.7 Billion Barclays Announced to Buy Tesco UK Retail Banking for $757 Million, Assets Include £6.7 Billion Deposits, £4.2 Billion Credit-Card Receivables & £4.1 Billion Unsecured Personal Loans
9th February 2024 – Barclays PLC (“Barclays”) announces that Barclays Bank UK PLC (“Barclays UK”) has entered into an agreement with Tesco Personal Finance plc (operating using the trading name “Tesco Bank”) to acquire the retail banking business of Tesco Bank, which includes credit cards, unsecured personal loans, deposits and the operating infrastructure. Additionally, Barclays UK will enter into a long-term, exclusive strategic partnership with Tesco Stores Limited for an initial period of 10 years 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.
Partnering with Tesco PLC (“Tesco”), the UK’s largest retailer which also operates the UK’s largest loyalty scheme, represents a key opportunity to further our UK retail banking strategic ambitions. Barclays UK will market Tesco-branded credit cards, unsecured personal loans and deposits to customers through Tesco’s distribution channels as well as on the open market. The acquired customer base will complement Barclays UK’s current business, as well as build on the existing UK strategic partnerships with other leading retail, consumer electronics and loyalty programme brands.
The transaction involves the acquisition of approximately £8.3 billion of unsecured lending balances with a credit quality consistent with our existing UK portfolios. The transaction as a whole is expected to offer attractive financial returns over the term of the agreements and will increase the weighting of our unsecured lending business within Barclays UK. The business being acquired includes approximately 2,800 employees, encompasses technology and operational infrastructure and made an adjusted operating profit of approximately £85 million in the 12 months ended February 20231. Barclays UK’s intention is to integrate the business into its operational infrastructure over time. If completion of the transaction were to occur at the end of July 2024, Barclays UK expects to acquire approximately £4.2 billion of gross credit card receivables and £4.1 billion of gross unsecured personal loans, together with approximately £6.7 billion in customer deposits. Tangible net assets acquired at completion of the transaction are expected to be approximately £960 million, including an expected credit loss allowance of approximately £(490) million. The consideration payable by Barclays UK at completion is expected to be approximately £600 million.
About Barclays
Barclays is a British universal bank. We are diversified by business, by different types of customer and client, and geography. Our businesses include consumer banking and payments operations around the world, as well as a top-tier, full service, global corporate and investment bank, all of which are supported by our service company which provides technology, operations and functional services across the Group. For further information about Barclays, please visit our website home.barclays.
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