Tesco announced it has completed the sale of Edinburgh-based Tesco Bank to Barclays and has commenced a long-term strategic partnership with the bank.

Tesco also confirm that it now intends to return £700 million to shareholders via an incremental share buyback

“Following the announcement on 9 February 2024, Tesco is pleased to confirm that it has completed the sale of its banking operations and started its associated strategic partnership with Barclays,” said Tesco.

“The exclusive 10-year partnership provides customers access to Tesco-branded banking products and services, combining Tesco’s market-leading brand, physical & digital reach and relentless customer focus with Barclays’ deep financial services capabilities and expertise in commercial partnerships.

“The partnership also creates the opportunity to develop new and innovative products with Barclays under the Tesco-bank brand …

“Tesco will retain all the existing insurance and money services activities, including ATMs, travel money and gift cards. These are capital-light, profitable businesses with a strong connection to the core retail offer. Having now completed the sale of its banking operations, Tesco is pleased to confirm that it intends to return £700m to shareholders via an incremental share buyback, being the full cash proceeds and the additional net cash after the settlement of certain regulatory capital amounts and after transaction costs.

“This is expected to commence following completion of the final tranche of the £1bn buyback programme which is currently underway.”

Tesco CEO Ken Murphy said: “We are delighted to be working alongside Barclays to unlock even greater value for Tesco Bank customers. Through our strategic partnership, customers will have access to new and innovative propositions, while continuing to enjoy the unique benefits of Tesco Clubcard.

“This is a significant moment for all our colleagues at Tesco Bank and I want to say a heartfelt thank you for all their hard work, helping millions of loyal customers to manage their money for more than 25 years. Their dedication is relentless and I know that this new partnership with Barclays will only build on their success.”

Barclays CEO C.S. Venkatakrishnan CEO: “This acquisition is an important step in increasing our investment in the UK. We look forward to collaborating with Tesco Group on delivering Tesco-branded financial services. We are delighted to welcome all transferring Tesco Bank employees and customers to Barclays.”

Barclays UK CEO Vim Maru said: “Today marks a significant step as we continue to grow Barclays UK. We will bring the strength of both businesses together, benefitting customers and colleagues. I am excited that the combination of our brands, alongside the benefits of Clubcard and its loyalty scheme, will support millions of households across the UK with their financial needs.”