Barclays to Acquire Tesco Bank, Partner With Tesco Stores

Barclays has entered into an agreement to acquire Tesco’s retail banking business, including its credit cards, unsecured personal loans, deposits and operating infrastructure.

The acquisition of Tesco Bank will be carried out by Barclays UK, the companies said in a Friday (Feb. 9) press release.

In addition, Barclays UK will enter into a long-term strategic partnership with Tesco Stores Limited for a period of 10 years, according to the release. Through this partnership, Barclays will offer financial services to Tesco customers, marketing Tesco-branded credit cards, unsecured personal loans, and deposits.

The acquisition of Tesco Bank involves approximately 8.3 billion pounds (about $10.5 billion) of unsecured lending balances, which aligns with Barclays UK’s existing portfolios in terms of credit quality, the release said.

As part of the acquisition, approximately 2,800 employees of Tesco Bank will join Barclays UK, per the release.

Barclays UK expects to acquire around 4.2 billion pounds ($5.3 billion) of gross credit card receivables, 4.1 billion pounds ($5.2 billion) of gross unsecured personal loans, and 6.7 billion pounds ($8.5 billion) in customer deposits, according to the release.

Subject to court sanction and regulatory approvals, the completion of the acquisition and strategic partnership is anticipated to occur in the second half of 2024, the release said.

C.S. Venkatakrishnan, group chief executive of Barclays, said in the release that the partnership will create new distribution channels for Barclays’ unsecured lending and deposit businesses, and bring Barclays’ expertise to further enhance the already successful Tesco Clubcard loyalty program.

Ken Murphy, group chief executive of Tesco, said the partnership will unlock greater value for customers and Tesco’s business, providing customers with new and innovative offers.

It was reported in November that Barclays was considering the acquisition of Tesco’s banking operations. Tesco had invited potential buyers to submit non-binding offers for Tesco Bank as part of its efforts to downsize its financial services footprint.

Barclays aims to grow its U.K. retail banking business, and the new partnership will add to the bank’s existing collaborations with other retail, consumer electronics and loyalty program brands, according to the Friday press release.

“Similar to our acquisition of Kensington Mortgages last year, this partnership with Tesco is a further demonstration of the investment we continue to make in our UK consumer business,” Venkatakrishnan said in the release.