London Daily

Focus on the big picture.
Saturday, Jun 21, 2025

Supermarket giant Tesco to explore sale of banking arm

Supermarket giant Tesco to explore sale of banking arm

The UK's biggest retailer is to kick off a review of its presence in the financial services sector that could trigger a formal sale process.
Tesco, Britain's biggest supermarket chain, is to kick off a review of its presence in the UK banking sector - a move that could lead to a sale of the business.

Sky News has learnt that the grocery giant is lining up Goldman Sachs to advise on the future of Tesco Bank, which launched in 1997.

City insiders said this weekend that the review was at a very preliminary stage and may not lead to a formal sale process.

One source suggested that a partial sale or joint venture could also be an option for the retailer.

A banking analyst suggested this weekend that if it was sold, Tesco Bank could be worth more than £1bn based on its book value.

The company has more than five million customers, offering products including pet insurance, savings accounts and credit cards.

Ken Murphy, who has been Tesco's chief executive since 2020, has been publicly supportive of its presence in the banking sector.

Based in Edinburgh, Tesco Bank employs 3,800 people and generated adjusted operating profits of £67m in its last half-year results.

There is no suggestion that the review of the business could result in any form of wind-down or job losses.

"The bank's balance sheet remains strong, and we continue to have sufficient capital and liquidity to absorb changes in both regulatory and funding requirements," it said in its most recent results announcement.

Tesco Bank retreated from the UK mortgage market in 2019, announcing the sale of its existing mortgage book to Lloyds Banking Group for a cash consideration of £3.8bn.

Last month, it named Jacqui Ferguson, a former Hewlett Packard Enterprise Services executive, as its interim chair.

Her appointment follows the departure of Sir John Kingman, the former Treasury mandarin who had chaired the bank since 2019.

Sir John resigned to join Barclays as chair of its UK ring-fenced bank.

Tesco's potential exit from the banking business comes 15 years after it paid £950m to acquire the then crisis-hit Royal Bank of Scotland's 50% stake in their Tesco Personal Finance joint venture.

More recently, rival J Sainsbury has also explored the disposal of its banking arm but decided in 2021 to terminate discussions with suitors.

The list of potential buyers of Tesco Bank would be expected to include other mid-sized UK lenders as well as financial investors.

Tesco has recovered strongly from the biggest crisis in its history, which emerged in 2014 when the company overstated income, triggering a Serious Fraud Office probe and protracted shareholder litigation.

Mr Murphy, who replaced Sir Dave Lewis at the helm of Tesco, has sought to exert tight control of its cost-base amid growing inflationary pressures.

Last month, he snapped up the Paperchase stationery retail brand and announced a shake-up of store management roles which put more than 2,000 jobs at risk.

Tesco and Goldman Sachs both declined to comment.
Newsletter

Related Articles

0:00
0:00
Close
Political Turmoil Resurfaces in Belgium Amid Economic Concerns
Fed policymakers divided on timing of interest rate cuts
Trump signals imminent agreement with Harvard University
Inheritance tax referendum alarms Swiss billionaire community
Japan cancels bilateral security meeting amid US defence demands
AI skeptic Emily Bender warns that ‘the emperor has no clothes’
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
UK Home Secretary Apologizes Over Child Grooming Failures
Trump Organization Launches 5G Mobile Network and Golden Handset
Towcester Hosts 2025 English Greyhound Derby Amid Industry Scrutiny
Gary Oldman and David Beckham Knighted in King's Birthday Honours
Over 30,000 Lightning Strikes Recorded Across UK During Overnight Storms
Princess of Wales Returns to Public Duties at Trooping the Colour
Red Arrows Use Sustainable Fuel in Historic Trooping the Colour Flypast
Former Welsh First Minister Addresses Unionist Concerns Over Irish Language
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
France Bars Israeli Arms Companies from Paris Defense Expo
King Charles Leads Tribute to Air India Crash Victims at Trooping the Colour
Jack Pitchford Embarks on 200-Mile Walk to Support Stem Cell Charity
Surrey Hikers Take on Challenge of Climbing 11 Peaks in a Single Day
UK Deploys RAF Jets to Middle East Amid Israel-Iran Tensions
Two Skydivers Die in 'Tragic Accident' at Devon Airfield
Sainsbury's and Morrisons Accused of Displaying Prohibited Tobacco Ads
UK Launches National Inquiry into Grooming Gangs
Families Seek Closure After Air India Crash
Gold Emerges as Global Safe Haven Amid Uncertainty
Trump Reports $57 Million Earnings from Crypto Venture
Trump's Military Parade Sparks Concerns Over Authoritarianism
×