Tesco PLC Tesco Bank confirms sale of mortgage portfolio (0188L)
September 03 2019 - 2:01AM
UK Regulatory
TIDMTSCO
RNS Number : 0188L
Tesco PLC
03 September 2019
Tesco PLC
03 September 2019
Tesco Bank confirms sale of mortgage portfolio to Lloyds Banking
Group
Tesco Personal Finance Plc. ('Tesco Bank') today confirmed the
sale of its mortgage portfolio to Lloyds Banking Group for a cash
consideration of c. GBP3.8bn. Tesco Bank has over 23,000 mortgage
customers.
The mortgage portfolio has a lending balance of c. GBP3.7bn and
generated directly attributable pre-tax profits of GBP9.1m in the
2018/19 financial year (after allocation of central overheads and
other related costs the business made an immaterial contribution to
Tesco Bank's overall profitability). As part of the sale the entire
residential mortgage portfolio and arrangements for the ongoing
administration will transfer to Halifax, a division of Bank of
Scotland plc, a wholly owned subsidiary of Lloyds Banking Group.
The customer accounts will transfer to Halifax once necessary
transitional arrangements have been delivered. It is anticipated
that beneficial ownership will transfer at the end of September
2019 with legal title occurring by the end of March 2020.
The sale is in line with Tesco Bank's strategy of focusing on a
reduced number of products and services that serve the broad range
of Tesco customers, and will reduce operating and funding costs.
The sale proceeds will be used for re-investment into our customer
offer, ongoing transformation of the business and re-balancing of
retail and wholesale funding sources given the reduction in overall
lending.
Commenting on the sale, Gerry Mallon, Tesco Bank Chief
Executive, said:
"In May we announced our decision to stop new mortgage lending
while we explored our options to sell the mortgage book.
"Our focus is on how we best serve Tesco customers and align our
resources effectively to their needs while ensuring that our offer
remains sustainable in the long term. As a result, we made the
decision to move away from our mortgage offering. Our priority
throughout has been to complete a commercially acceptable
transaction with a purchaser who will continue to serve our
customers well.
"After a thorough process, we are pleased to confirm that we
have agreed the sale of our mortgage book to Lloyds Banking Group,
operating under the Halifax brand. We are confident that they will
continue to provide our customers with an excellent customer
experience."
LEI Number: 2138002P5RNKC5W2JZ46
Enquiries:
Investors Chris Griffith 01707 912 900
Media Simon Rew 01707 918 701
Adam Shaw (Charlotte Street Partners) 07824 096 155
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END
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