- High street giant is set to snap up most of Tesco Bank’s business
- Tesco Bank has five million customers in the UK
- This is what it means for Tesco Bank borrowers, savers and insurance customers
Barclays has just unveiled a £700million deal to buy most of Tesco Bank, leaving the supermarket bank’s five million customers wondering what their future holds.
Tesco Bank offers customers a wide range of financial products, including savings, insurance, credit cards and loans.
But while some of Tesco Bank will be owned by Barclays if the deal goes through, the high street bank will not take over everything and Tesco will be keeping some parts of its financial business.
Here is everything you need to know about the deal and how it affects Tesco Bank customers.
What parts of Tesco Bank is Barclays taking over?
The deal has not yet happened, and is waiting for regulatory approval that will come in the second half of 2024.
Put simply, Barclays plans to take over the retail arm of Tesco Bank. That means anything to do with credit cards, savings and loans.
A Barclays stock exchange announcement said the bank wants to ‘enter into a long-term, exclusive strategic partnership with Tesco Stores Limited for an initial period of 10 years’.
This will allow it 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’.
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What is Tesco keeping?
Tesco is keeping everything else. In full, that means travel, pet and car insurance, as well as travel money, gift cards and cash machines, as well as Tesco Mobile and the Clubcard scheme.
Are there any immediate changes?
No. Barclays is not closing or selling any part of the business it has bought from Tesco.
As far as Tesco Bank customers are concerned, nothing will happen to change the financial deals they have entered into.
These will be run by Barclays, but still badged up as Tesco. Barclays will also take on 2,800 Tesco Bank staff as part of the deal.
The initial deal between the firms will last for 10 years at the least.
The news follows rival supermarket Sainsbury’s unveiling plans last month to gradually wind down its banking arm and focus on its supermarket business.
What has Tesco Bank already sold or stopped?
The supermarket-owned bank sold its mortgage operation to Lloyds Banking Group for £3.8billion in 2019.
Tesco Bank also shut all its current accounts in November 2021.
What has Barclays said?
Barclays group chief executive C.S. Venkatakrishnan said: ‘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.’
What has Tesco Bank said?
Tesco group chief executive Ken Murphy said: ‘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.’
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