Tesco Bank confirms sale of mortgage portfolio to Lloyds Banking Group
3 September 2019
Tesco Personal Finance Plc. (‘Tesco Bank’) today confirmed the sale of its mortgage portfolio to Lloyds Banking Group for a cash consideration of c. £3.8bn. Tesco Bank has over 23,000 mortgage customers.
The mortgage portfolio has a lending balance of c. £3.7bn and generated pre-tax profits of £9.1m in the 2018/19 financial year. As part of the sale the entire residential mortgage portfolio and arrangements for the ongoing administration will transfer to Halifax, a Division of Bank of Scotland plc, a wholly owned subsidiary of Lloyds Banking Group. The customer accounts will transfer to Halifax once necessary transitional arrangements have been delivered. It is anticipated that beneficial ownership will transfer at the end of September 2019 with legal title occurring by the end of March 2020.
The sale is in line with Tesco Bank’s strategy of focusing on a reduced number of products and services that serve the broad range of Tesco customers, and will reduce operating and funding costs. The sale proceeds will be used for re-investment into our customer offer, ongoing transformation of the business and re-balancing of retail and wholesale funding sources given the reduction in overall lending.
Commenting on the sale, Gerry Mallon, Tesco Bank Chief Executive, said,
“In May we announced our decision to stop new mortgage lending while we explored our options to sell the mortgage book.
“Our focus is on how we best serve Tesco customers and align our resources effectively to their needs while ensuring that our offer remains sustainable in the long term. As a result, we made the decision to move away from our mortgage offering. Our priority throughout has been to complete a commercially acceptable transaction with a purchaser who will continue to serve our customers well.
“After a thorough process, we are pleased to confirm that we have agreed the sale of our mortgage book to Lloyds Banking Group, operating under the Halifax brand. We are confident that they will continue to provide our customers with an excellent customer experience.”
For more information and media enquiries please contact:
Adam Shaw, Charlotte Street Partners
+44 (0) 7824 096155 / +44 (0)131 274 3630
Tesco Bank’s goal is to make banking and insurance easier and better value for people who shop at Tesco. We’ve been around since 1997 and today we help more than 5 million customers manage their money every day. Our 4,000 colleagues serve our customers seven days a week from our three main centres in Edinburgh, Glasgow and Newcastle, and we are also available through online and mobile banking 24/7. Tesco Bank participates in the Chartered Banker Professional Standards Board.
Tesco Bank is a trading name of Tesco Personal Finance plc. Registered in Scotland No. SC173199. Registered Office: 2 South Gyle Crescent, Edinburgh, EH12 9FQ