Meanwhile, Tesco plans to expand its rapid delivery series Whoosh to 800 stores by the end of the month.
British multinational grocery and general merchandise retailer Tesco (LON: TSCO) is considering selling its banking business arm. This comes as the retailer plans to review its presence in the banking sector in the UK. The matter was first reported by Sky News, which cited people familiar with the matter as sources.
Tesco Exploring Sale of Banking Unit
According to the report, Tesco has started a review that may affect the banking unit. However, the source confirmed that the review was in the preliminary stage, and the option of a formal sale was at bay. Another source said that the UK company could consider a partial sale or collaborate with another company. A banking analyst valued Tesco Bank if the retailer eventually sells its baking arm. The analyst said the financial institution could be worth over £1 billion based on its book value. Notably, Tosco bank accounts for more than five million customers. These customers enjoy the bank’s various services, including pet insurance, credit cards, and savings accounts.
While many companies across different sectors dismiss workers due to economic instability and fears of increased inflation, the report said there are no suggestions that Tesco could cut jobs due to the review. The UK retailer noted in a recent announcement:
“The bank’s balance sheet remains strong, and we continue to have sufficient capital and liquidity to absorb changes in both regulatory and funding requirements.”
In 2019, the Tesco banking branch withdrew from the UK mortgage market and divested its British residential portfolio to Lloyds Banking Group for a consideration of £3.8 billion. The company also purchased the Paperchase brand in January. The same month, it welcomed a new former HP Enterprise Services executive Jacqui Ferguson. She assumed duties as the interim chair following the departure of former Treasury mandarin, who chaired the bank between 2019 and January 2023.
Tesco’s Retailing Business
While its banking presence in the UK is under review, the retailer consistently pushes forward to satisfy its consumers. Tesco plans to expand its rapid delivery series Whoosh to 800 stores by the end of the month. The service, launched in 2021, has grown to 600 sites in the UK. The latest target is to add 200 locations to its current reach in the coming weeks. Another effort Tesco made recently was its partnership with tech logistics firm Stuart. The UK company collaborated with Stuart to reduce its delivery timeframe and reach customers more quickly. As a result of the joint work, more than 90% of Tesco’s online orders via Whoosh are completed in less than 30 minutes. Furthermore, the company delivers 99% of orders made through the service within one hour.
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