Tesco 'eyeing up sale of its bank business' affecting 5million customers
The UK's biggest supermarket chain Tesco is reportedly looking into selling the banking arm of the business.
It was reported this weekend that the retailer was in the "very preliminary stage" of a review into Tesco Bank.
Although, sources told Sky News that the review may not lead to a formal sale process.
Sky News cited "city insiders" as the source for the report with one insider telling the news outlet that a "partial sale or joint venture" could be an option for the retailer.
Based on its book value, the sale of Tesco Bank could bring in more than £1billion for the retailer.
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The investment and financial services firm, Goldman Sachs has been reportedly lined up to advise Tesco on the sale of Tesco Bank.
The list of potential buyers of Tesco Bank is expected to include other mid-sized UK lenders as well as financial investors Sky News reports.
Tesco Bank employs around 3,800 people and it is based in Edinburgh but also has staff in Glasgow and Newcastle.
There is no suggestion that the review of the business could result in any form of wind-down or job losses at the moment.
Tesco Bank was launched in 1997 and currently has around 5.2million customer accounts on its books.
Tesco Bank offers a range of personal banking and insurance products, including personal loans, credit cards, car insurance and pet insurance.
On it's website, Tesco Bank says it currently holds nearly £6billion in customer deposits.
In the first half of 2022, Tesco Bank recorded an adjusted operating profit of £67million, down 6.9% on the year before.
It forecasts an operating profit of between £120million and £160million for the full year.
As with other UK banks, customers of Tesco Bank are protected by the Financial Services Compensation Scheme (FSCS), meaning a maximum of £85,000 per person is protected if the bank goes bust.
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A sale of this size would not be completed quickly and the financial regulator, the Financial Conduct Authority (FCA), will most likely monitor the sale closely if it was to happen.
Once the acquiring bank has confirmed its contractual obligations of the other bank, customers then usually start getting notices about the sale and any possible changes.
Tesco Bank declined to comment on the reports.
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