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Exclusive talks likely

Santander in pole position to acquire Tesco Bank’s £3.7bn mortgage book

Santander branch

Spanish bank Santander is third biggest UK mortgage player (pic: Terry Murden)

Santander is thought to have headed off rival bids from Royal Bank of Scotland and Lloyds Banking Group to acquire Tesco Bank’s £3.7 billion mortgage business.

The Spanish bank is expected to enter exclusive talks for the book of 23,000 home loans which Edinburgh-based Tesco Bank put up for sale in May after stopping active lending. Nationwide was also interested in acquiring the business.

Santander’s mortgage market share is 11.3% and a further acquisition would help confirm its place as the UK’s third largest lender, ahead of RBS.

Tesco launched mortgages in 2012 but Gerry Mallon, who succeeded Benny Higgins as chief executive, said in May that the mortgage market had become less profitable for the group.

“Our priority in any sale, is to complete a commercially acceptable transaction with a purchaser who will continue to serve our customers well,” he said at the time.

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