|
Tesco PLC on Friday said it has completed the sale of its banking operations to Barclays Bank UK PLC, as the UK supermarket chain also pressed on with a plan to return cash to shareholders. The deal with the UK lender, part of Barclays PLC, had been announced earlier this year in February, and will see Barclays paying around £600 million for Tesco Personal Finance Ltd, which has been in operation for more than 25 years. Tesco Personal Finance will continue to operate under the Tesco Bank brand, but will now be managed by Barclays. Tesco noted at the time of the original announcement that it will receive about £1 billion in cash in total, including a further £100 million net cash after the settlement of some regulatory capital amounts and a special dividend of £250 million paid by Tesco Bank in August 2023. As a result, Tesco also on Friday confirmed its intention to return £700 million to shareholders through an incremental share buyback, the first tranche of which it expects to launch when its current ongoing £1 billion buyback programme has completed. Alongside the acquisition, Barclays entered a long-term, exclusive partnership with Tesco Stores Ltd for an initial ten-year period to market and distribute credit cards, unsecured personal loans, and deposits under the Tesco brand. The bank will explore further opportunities to utilise Tesco’s distribution channels to provide financial services. Tesco said it will retain all existing insurance and money services activities, including ATMs, travel money and gift cards, which are ‘capital-light, profitable businesses with a strong connection to the core retail offer’. Shares in Tesco were up 0.6% at 344.34 pence each in London on Friday morning. Barclays shares were up 0.6% at 238.95p each. Copyright 2024 Alliance News Ltd. All Rights Reserved.
|
