Barclays Bank UK has signed an agreement to acquire Tesco’s retail banking business for around £600 million (€703 million) and entered into an exclusive long-term partnership with the British supermarket chain to offer Tesco brand credit cards, personal loans and warehouses.

“We expect to receive revenue of around £600 million, plus around £100 million (€117 million) of additional net cash following the settlement of certain regulatory capital and transaction costs,” reported Tesco, which expects to return the majority of its earnings. this cash to shareholders in the form of share buybacks.

In this regard, the supermarket chain has indicated that it will retain all of Tesco Bank’s existing activities, including insurance, ATMs and gift cards, as both are profitable, low-capitalization businesses and have strong links to the core retail offering. company.

Around 2,800 Tesco Bank employees, including the management team, will transfer to Barclays as a result of the transaction, which is expected to complete in the second half of 2024.

Completion of the sale and entry into the strategic partnership is subject to legal sanctions and regulatory approval, as is customary in the transfer of banking operations.

“This strategic relationship with the UK’s largest retailer will help create a new distribution channel for our unsecured deposits and loans business,” said CS Venkatakrishnan, CEO of Barclays.

“This transaction will significantly reduce our financial liabilities, which in turn will strengthen our balance sheet and allow us to focus on continuing to grow our core retail business,” said Ken Murphy, Tesco CEO.

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