As part of a ten-year partnership between the two firms, Barclays will begin operating and managing Tesco Bank.
As part of a ten-year partnership between the two firms, Barclays will begin operating and managing Tesco Bank.
Barclays has finalised its £600m acquisition of Tesco’s banking division, following high court approval in October. As part of a decade-long partnership, Barclays will take over the operation and management of Tesco Bank.
However, Tesco will retain all of its existing insurance and money services activities, including ATMs, travel money and gift cards, with the supermarket stating these are “capital-light, profitable businesses with a strong connection to the core retail offer”. After the takeover, Tesco announced it would be returning £700m to shareholders through an additional share buyback, which will commence once its current £1bn buyback programme is completed, reports City AM.
With the takeover announced in February, the Big Four bank has now taken on Tesco Bank’s 2,800 staff, along with billions in customer deposits, credit card receipts and unsecured personal loans. “We are delighted to be working alongside Barclays to unlock even greater value for Tesco Bank customers,” said Tesco group CEO Ken Murphy.
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“Through our strategic partnership, customers will have access to new and innovative propositions, while continuing to enjoy the unique benefits of Tesco Clubcard.”
Barclays group chief executive CS Venkatakrishnan added: “This acquisition is an important step in increasing our investment in the UK,”.
“We look forward to collaborating with Tesco Group on delivering Tesco-branded financial services. We are delighted to welcome all transferring Tesco Bank employees and customers to Barclays.”
This announcement comes hot on the heels of Barclays shares reaching a nine-year peak last week, following an 18% surge in pre-tax profit over the past year, surpassing the forecasts of analysts. “Today marks a significant step as we continue to grow Barclays UK,” said Barclays UK chief executive Vim Maru.
“We will bring the strength of both businesses together, benefitting customers and colleagues. I am excited that the combination of our brands, alongside the benefits of Clubcard and its loyalty scheme, will support millions of households across the UK with their financial needs.”