A BIG supermarket bank has been sold to Barclays in a move that will affect more than five million customers.
A major bank has agreed to buy Tesco Bank’s retail banking arm, including taking on nearly 3,000 employees, it has announced.
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Tesco Bank has sold its consumer banking arm to BarclaysCredit: Alamy
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Barclays Bank takes over all Tesco Bank customers and nearly 3,000 employees Credit: Alamy
It follows reports that Tesco was considering the future of its banking arm and that HSBC had submitted an indicative offer for the business.
The move will affect millions of credit card, loan and savings customers.
Although these services will be run 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 there was no need for customers to take any action and would be in touch with them over the coming months.
There is no current deadline for how long the changes will last.
Ken Murphy, CEO of Tesco Group, said: “Tesco Bank is a strong company that has helped millions of loyal customers manage their money for over 25 years.
“Looking forward, we aim to be the best financial services provider in the UK and this strategic transaction and partnership with Barclays unlocks greater value for customers and 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 approximately £600m for Tesco Bank’s credit cards, unsecured personal loans, deposits and operational systems.
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2,800 Tesco Bank employees will also eventually transfer to Barclays.
The lender stopped offering mortgages through its bank in 2019 after seven years.
These are 23,000 mortgage loans that were sold to Lloyds Banking Group, of which Halifax is a part, for around £3.8 billion.
It comes after Sainsbury’s announced it will close its banking division – known as Sainsbury’s Bank – as part of plans to focus on retail.
Last summer Sainsbury’s Bank transferred its £479m mortgage book to the Co-op Bank.
On the other hand, ailing Metro bank announced 800 job cuts and revised working hours in a new attempt to cut costs.
The central bank is considering reducing its branch office hours to seven days as it tries to recover costs.
It comes after a difficult period for UK banks.
The latest announcements mean more than 190 branches will close so far this year as banks look to get off the high street.
Data from Britain’s largest ATM network, LINK, tracks all planned branch closures across the UK.
Several major lenders were affected, such as Barclays, Lloyds and Bank of Scotland.
Customers are increasingly turning to online banking to manage their finances, while banks and housing associations are looking for ways to cut costs.
Meanwhile, 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 a maximum of £85,000 per person is protected if the bank fails.
The banking regulator will closely monitor the sale.
In the short term, customers probably won’t notice much change.
When the Co-op Bank was put up for sale in 2017, there was no direct impact on products and services.
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