Tesco on Friday said it was selling the retailing banking business of Tesco Bank to Barclays for \u00a3600 million initially, and then another \u00a3100 million after the settlement of certain regulatory capital amounts and after transaction costs. <\/p>\n
The U.K. supermarket chain said it will use majority of a combined \u00a31 billion, which also includes a special dividend previously announced from Tesco Bank, for a share buyback.<\/p>\n
It will retain insurance, ATMs, travel money and gift cards, that on a proforma basis account for roughly \u00a380 million to \u00a3100 million in operating profit, and said the deal is mildly accretive to earnings per share.<\/p>\n
Barclays said it\u2019s acquiring credit cards, unsecured personal loans, deposits and the operating infrastructure that includes \u00a38.3 billion of unsecured lending balances with a credit quality consistent with its existing U.K. portfolios. The business it\u2019s buying had an adjusted operating profit of approximately \u00a385 million in the 12 months ended February 2023.<\/p>\n
Barclays also will enter into an exclusive strategic partnership with Tesco for an initial period of 10 years to market and distribute credit cards, unsecured personal loans and deposits using the Tesco brand, paying \u00a350 million per year.<\/p>\n
Tesco
\n TSCO,
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\n shares have dropped 3% this year while Barclays
\n BARC,
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\n shares have declined by 7%.<\/p>\n<\/p><\/div>\n<\/div>\n