Tesco Bank to be bought by Barclays

Section62

This could be interesting....

https://www.bbc.co.uk/news/business-68249167

DullGreyGuy

Section62 said:

This could be interesting....

In what way?

Section62

DullGreyGuy said:

Section62 said:

This could be interesting....

In what way?

What will happen to existing Tesco savings account holders - will Barclays (not known for their savings products) want to do something to keep them, or will they go the other way and reduce interest rates to get them off the books?

When Tesco offered current accounts the deal would have given Barclays the opportunity to gain a reasonable number of new current account customers and increased their market share, but the rump of Tesco Bank doesn't obviously fit so well in Barclays.  That Barclays will continue to provide Tesco-branded products for 10 years also strikes me as a little odd, unless they are keen to have an arms-length brand to appeal to potential customers who wouldn't be attracted by the Barclays name.

Interesting, because if I didn't already have a Tesco savings account I think I might open one now on the off-chance that Tesco legacy customers may get some kind of loyalty benefit to keep them on board when they become Barclays customers.

ircE

See existing discussion over in Budgeting & bank accounts: https://forums.moneysavingexpert.com/discussion/6479642/tesco-asks-goldman-sachs-to-find-buyers-for-banking-business/

Hoenir

Section62 said:

DullGreyGuy said:

Section62 said:

This could be interesting....

In what way?

What will happen to existing Tesco savings account holders - will Barclays (not known for their savings products) want to do something to keep them, or will they go the other way and reduce interest rates to get them off the books?

When Tesco offered current accounts the deal would have given Barclays the opportunity to gain a reasonable number of new current account customers and increased their market share, but the rump of Tesco Bank doesn't obviously fit so well in Barclays.  That Barclays will continue to provide Tesco-branded products for 10 years also strikes me as a little odd, unless they are keen to have an arms-length brand to appeal to potential customers who wouldn't be attracted by the Barclays name.

Interesting, because if I didn't already have a Tesco savings account I think I might open one now on the off-chance that Tesco legacy customers may get some kind of loyalty benefit to keep them on board when they become Barclays customers.

Tesco Bank provides Barclays with access to retail deposits. 10 years ago the major banks were in a very different place. Still adjusting to the post GFC regulatory era. Now they've have time to regroup and go back on the offensive. As both Tesco's and Sainsbury's found gaining traction and scale in banking is extremely challenging. Not least due to the amount of capital it ties up. 

mebu60

Barclays could offer higher savings rates on Tesco products to attract funds from a relatively smaller population if they required them without increasing their offer on own-brand savings with its large inert base. 

refluxer

Looks like the takeover is now complete. There'll be no big changes for Tesco Bank customers (at least initially) but one important thing to bear in mind is that they now share the same £85,000 FSCS protection as Barclays.

https://www.moneysavingexpert.com/news/2024/02/tesco-bank-sold-to-barclays/

subjecttocontract

That made me chuckle. Absolutely no risk of that affecting me. Barclays or Tesco are, for sure, the last place I would consider to be depositing £85000.