Tesco Bank may be sold

Jim431

The troubled supermarket giant is considering the sale or float of Tesco Bank.

https://uk.finance.yahoo.com/news/tesco-eyes-1bn-bank-sale-204506888.html

DCFC79

Im not surprised to be honest re the sale bank and other assets.

pmduk

If they were found guilty of offences following the current SFO investigation would they be allowed to continue running a bank anyway?

I appreciate this is reaching into the unknown

Generali

pmduk wrote: »

If they were found guilty of offences following the current SFO investigation would they be allowed to continue running a bank anyway?

Yes because the 2 are separate companies.

Even if these accounting problems had been found in the bank I'd be surprised to see the license taken away.

Thrugelmir

Tesco's requires capital. There's £16 billion of off balance sheet liabilities that come back into the accounts in 2016, when the accounting rules change. Be a few other companies impacted as well.

ceredigion

6 million customers. Wonder that % just run £1 DD's and not a lot else

callum9999

ceredigion wrote: »

6 million customers. Wonder that % just run £1 DD's and not a lot else

A rather small percentage I'd wager - it's not something the average person would do.

colsten

ceredigion wrote: »

6 million customers. Wonder that % just run £1 DD's and not a lot else

Can't be too many DD customers, judging by how many people don't seem to comprehend the concept of a £1 DD using Tesco.

Most of the 6m customers they have are likely to be CC holders, some of them 0% no-fee BT ones paying back monthly minimum amounts (incl myself) - much more of a liability than the £1 DD brigade (which I am also part of). I would think though that their CC business will be very profitable overall. Also don't forget their insurance offerings, all part of Tesco Personal Finance.

If you have a penchant for detailed numbers: http://corporate.tescobank.com/assets/files/cms/7657G__2014_5_9.pdf

Thomas_Crown

Jim431 wrote: »

The troubled supermarket giant is considering the sale or float of Tesco Bank.

https://uk.finance.yahoo.com/news/tesco-eyes-1bn-bank-sale-204506888.html

Jim431, you forgot to include the word ''partial'' in your post. It should read ''The troubled supermarket giant is considering the partial sale or float of Tesco Bank''. They are not looking at selling/floating the whole of the bank.

System

Whilst the Bank is profitable, there are definite linkage between customer base of both.

E.G. many (supermarket bank) credit card customers never borrow and by the time they get their points (factoring in declining interchange fees) the bank will often operate them at a slight loss. Those customers would be profitable for supermarket as a whole but not the bank alone.

Thrugelmir

Heng_Leng wrote: »

Whilst the Bank is profitable, there are definite linkage between customer base of both.

E.G. many (supermarket bank) credit card customers never borrow and by the time they get their points (factoring in declining interchange fees) the bank will often operate them at a slight loss. Those customers would be profitable for supermarket as a whole but not the bank alone.

Credit card usage generates fee income from card activity.

The problem for the challenger banks is that they are up against players in a different league. Organic growth is a long slow road.