Bids expected

Barclays ‘makes indicative offer’ for Tesco Bank

Tesco Bank
Tesco has put its banking operations under review (pic: Terry Murden)

Barclays is said to be heading a list of potential buyers of Edinburgh-based Tesco Bank after the supermarket group hired investment bankers to review its operations.

Tesco has invited non-binding offers for the bank which is headquartered at the Gyle. Barclays is believed to be particularly interested in Tesco Bank’s credit card and saving account products.

Sources say it has made an indicative bid and that others are expected to table offers.

Tesco’s banking operations are likely to be attractive to other financial groups because of the opportunity to sell products to customers of Britain’s biggest grocer.

Barclays, Tesco and Tesco Bank have not commented.

It emerged last month that Goldman Sachs had been appointed by the FTSE 100 company to seek a buyer for Tesco Bank as the supermarket group seeks a retreat from financial services, first indicated in February when it said the business was under review.

It has already sold the bank’s mortgage book to Lloyds Banking Group for £3.8 billion and has withdrawn from the current account market.

Tesco entered the industry in 1997 through a 50-50 joint venture with Royal Bank of Scotland and took full ownership in 2008. At the end of August it had a book value of nearly £1.5 billion.

It still has about five million customers and services that range from insurance to savings accounts, credit cards and personal loans.

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