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Tesco Considers Selling Its Banking Arm

Currently, the British supermarket chain Tesco is considering selling its banking division.

Tesco Considers Selling Its Banking Arm

Source: Pixabay.com

As part of the consideration of this opportunity, the retailer is interacting with Goldman Sachs to get on the prospects for the functioning of the banking division. Currently, the retail chain is exploring two options for action regarding the division, including a partial sale and a joint venture.

Discussion of the possibility of a sale is at a preliminary stage. This means that the consideration of the issue is theoretical, and the retailer may not proceed to practical actions, abandoning his intention.

Tesco Bank, which is based in Edinburgh, currently employs 3,800 people. According to the results of the second half of last year, the adjusted operating profit of the financial institution amounted to 67 million pounds.

Preliminary forecasts state that by the end of the 2022/2023 financial year, Tesco Bank will receive revenues ranging from 120 to 160 million pounds. Banking analysts admit the possibility of an increase in the value of a financial institution’s business up to 1 billion pounds.

Tesco Bank was founded in 1997. Currently, the financial institution has a customer base consisting of 5 million people. The bank offers consumers a set of insurance, savings accounts, and credit cards. The supermarket chain closed its current account offering in 2021 after discovering that only 12% of customers used it as their primary account.

The bank was established as a joint venture, 50% of which was owned by The Royal Bank of Scotland. The other 50% was owned by Tesco. Later, the retail chain acquired a stake in the Royal Bank of Scotland, as a result of which the bank became a wholly owned subsidiary. Now the financial institution operates under its banking license.

As we have reported earlier, Bank of London Scores $40 Million Series C Extension.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.