Barclays Bank UK has completed the acquisition of Tesco Bank’s retail banking business for about at £600m ($775m).
The agreement, first announced in February this year, includes credit cards, unsecured personal loans, deposits, and the necessary operating infrastructure.
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The tangible net assets acquired stand at £1bn, including £4.2bn in credit card receivables, £4.2bn in gross unsecured personal loans, and £6.8bn in customer deposits.
This strategic acquisition is anticipated to yield a pre-tax profit of approximately £0.3bn for the fourth quarter of 2024.
The transaction, funded by Barclays’ existing cash reserves, is estimated to slightly impact the Group’s CET1 ratio, with an expected reduction of around 20 basis points. This is primarily due to the addition of approximately £7bn of risk-weighted assets.
Barclays UK plans to gradually integrate the acquired business.
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By GlobalDataBarclays UK CEO Vim Maru said: “Today marks a significant step as we continue to grow Barclays UK. 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.”
In line with the acquisition, Barclays UK has also commenced a long-term strategic partnership with Tesco Stores Limited.
This ten-year exclusive agreement will allow Barclays to market and distribute financial products under the Tesco brand and explore further opportunities to offer services to Tesco customers.
The partnership aligns with Barclays UK’s strategy of collaborating with other prominent UK brands in retail and consumer sectors.
Tesco group chief executive Ken Murphy said: “We are delighted to be working alongside Barclays to unlock even greater value for Tesco Bank customers.
:Through our strategic partnership, customers will have access to new and innovative propositions, while continuing to enjoy the unique benefits of Tesco Clubcard.”
Tesco plans to return £700m to shareholders through an incremental share buyback.
The company will continue to maintain its insurance and money services, such as travel money, ATMs, and gift cards.
