Updated February 9th, 2024 at 15:07 IST
Tesco to sell banking operations to Barclays for 700 million euros
Tesco aims to streamline its focus and return value to shareholders through an additional share buyback programme.
Tesco sells to Barclays: Britain's retail giant Tesco announced on Friday its decision to offload most of its banking operations to Barclays for up to 700 million euros ($883 million). The move comes as comapny aims to streamline its focus and return value to shareholders through an additional share buyback programme.
The deal entails Tesco selling its current banking operations, encompassing credit cards, loans, and savings, effectively removing 7.7 billion euros of capital-intensive assets and 6.7 billion euros of financial liabilities from its balance sheet. However, Tesco will retain control over other non-banking activities such as insurance, ATMs, travel money, and gift cards, which are less capital-intensive.
In addition to the sale, Tesco and Barclays have forged a strategic partnership for an initial period of 10 years. Under this collaboration, Barclays will offer Tesco-branded banking products and services, enhancing customer offerings in the financial sector.
Reports from Reuters in November indicated Barclays' interest in acquiring Tesco's banking operations, setting the stage for the eventual agreement between the two corporate giants. The move underscores Tesco's strategic realignment towards its core retail business, while Barclays seeks to expand its footprint in the banking sector.
(with Reuters input)
Published February 9th, 2024 at 15:02 IST