Tesco asks Goldman Sachs to find buyers for banking business

[Deleted User]

subjecttocontract said:

Yeah.......after some thought I reckon a Tesco CC is probably only worth, to me, about £10 a year in extra Clubcard vouchers. So, I won't bother and it doesn't look like I've missed out on anything worthwhile.

It's value has been impacted by two unrelated events.

1. Due to the EU/EEA interchange fee cap on credit cards (0.3%), Tesco (bank) had to reduce the number of points on spending and likely barely break even on current issuing of Clubcard points.
2. Tesco (stores) have unintentionally made the credit card less attractive by making the whole Clubcard scheme less attractive. 

ircE

Perhaps a foreign sovereign wealth fund will express interest. They would certainly benefit from the existing brand recognition and reputation if they kept the branding. And it seems to be the way things go in UK plc these days...

boingy

ircE said:

Perhaps a foreign sovereign wealth fund will express interest. They would certainly benefit from the existing brand recognition and reputation if they kept the branding. And it seems to be the way things go in UK plc these days...

Bankwashing?

WillPS

I think Tesco would have reservations about lending their name to a state renowned for a poor human rights record.

Volcane

On the plus side my Tesco Clubcard is my highest credit limit on a single card and I receive constant 0% BT and MT offers.

wmb194

IIRC SWFs don't tend to buy entire businesses and some of them are probably feeling sore after losing lots of money in Credit Suisse. The big Canadian pension funds sometimes do but I don't remember them buying a bank.

I have a good idea: Fineco should buy it.

gsmh

WillPS said:

I think Tesco would have reservations about lending their name to a state renowned for a poor human rights record.

I've gone back through the comments in this thread and cannot see anything about a state renowned for a poor human rights record. I'm clearly missing something.

wmb194

gsmh said:

WillPS said:

I think Tesco would have reservations about lending their name to a state renowned for a poor human rights record.

I've gone back through the comments in this thread and cannot see anything about a state renowned for a poor human rights record. I'm clearly missing something.

When people think of SWFs they tend to think of ones from the Middle East and they have been known to invest in banks.

WillPS

gsmh said:

WillPS said:

I think Tesco would have reservations about lending their name to a state renowned for a poor human rights record.

I've gone back through the comments in this thread and cannot see anything about a state renowned for a poor human rights record. I'm clearly missing something.

Apologies, I should have quoted - it was relating to the suggestion that a Sovereign Wealth Fund would be a potential suitor, with Tesco brand attached.

wmb194

This morning the answer has been announced: Barclays will buy Tesco Bank for c.£600m and up to c.£700m. It sounds like it will continue to offer Tesco branded financial products. I guess it's small enough that it doesn't raise any competition issues.



https://www.londonstockexchange.com/news-article/TSCO/strategic-partnership-sale-of-banking-business/16325180

"If completion of the transaction were to occur at the end of July 2024, Barclays UK expects to acquire approximately £4.2 billion of gross credit card receivables and £4.1 billion of gross unsecured personal loans, together with approximately £6.7 billion in customer deposits.  Tangible net assets acquired at completion of the transaction are expected to be approximately £960 million, including an expected credit loss allowance of approximately £(490) million.  The consideration payable by Barclays UK at completion is expected to be approximately £600 million.2"

https://www.londonstockexchange.com/news-article/BARC/acquisition-of-tesco-s-retail-banking-business/16325255