Barclays has agreed to acquire Tesco Bank. It will enter into an exclusive long-term partnership to offer Tesco-branded credit cards, personal loans and deposits. The deal is for an initial 10-year partnership and is reported to be worth £600m.
Tesco’s retail banking customer base is broadly similar to Barclays UK’s existing customers, with Barclays hoping that it will complement its current business, as well as build on existing UK strategic partnerships with other leading retail, consumer electronics and loyalty programme brands.
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Barclays to complete purchase of Tesco Bank in H2 2024
The acquisition and partnership are subject to regulatory approval and are expected to be completed in the second half of 2024. Once completed, Barclays will take on approximately 2,800 Tesco staff members who will become a part of the Barclays teams. Current Tesco Bank members have been informed that they will not need to take any action with their accounts.
This announcement comes after a period of speculation in which Tesco was considering taking a step back from the retail banking industry, with similar views being held by fellow supermarket chain Sainsbury’s. There are certain parts of the deal that are not included, such as including insurance products, travel money and ATMs.
C.S. Venkatakrishnan, Group Chief Executive of Barclays, commented: “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.
“This partnership with Tesco is a further demonstration of the investment we continue to make in our UK consumer business. We are looking forward to working closely with the team at Tesco over the coming months to enable a smooth transition and, subject to completion of the transaction, we look forward to welcoming Tesco Bank colleagues and customers to Barclays.”
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