TESCO has flogged its banking business to Barclays for £600million — after running it for 27 years.
Barclays said there would be no changes, for now, for Tesco’s 5million bank customers as it takes over its credit cards, loans, savings and current accounts.
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Tesco, which sold its mortgage arm five years ago, will continue to offer insurance and travel money.
There will be no job losses, with Tesco’s 2,800 banking staff moving over to Barclays.
The retailer first launched its bank in 1997 in a deal with Royal Bank of Scotland but was it bought out by RBS in 2008.
Tesco boss Ken Murphy said the deal will unlock “greater value for customers and for our business”.
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Barclays boss C.S. Venkatakrishnan called it a “further demonstration of the investment we continue to make in our UK consumer business”.
Barclays will hand Tesco a yearly income for using its brand.
Russ Mould, investment director at AJ Bell, said: “We’re in an era where companies are going back to basics — focusing on what they do best and letting non-core operations either be outsourced or sold.”
He said the move was a recognition by Tesco “that its time is better spent on the bread and butter, not the jam on the side”.
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Sainsbury’s said last month it was aiming to offload its bank so it can focus on its food business.
Major supermarket bank with over five million customers SOLD to Barclays
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The business will pay a £3,400 bonus to all of its 22,400 staff.
