Barclays has agreed to buy the retail banking business of Tesco Bank, including acquiring its 2,800 staff, the companies have announced.
The banking giant expects to pay roughly £600 million for Tesco Bank’s credit cards, unsecured personal loans, deposits and operating systems.
Tesco Bank employees will also transfer to Barclays over time.
Tesco said the “partnership” with Barclays will occur initially for a 10-year period, helping it to reduce debts and focus on its core retail business.
Ken Murphy, Tesco chief executive, said: “Tesco Bank is a strong business that has helped millions of loyal customers to manage their money for more than 25 years.
“As we look to the future, our aim is to be the best provider of financial services in the UK, with this strategic transaction and partnership with Barclays unlocking greater value for customers and for our business.”
CS Venkatakrishnan, Barclays group chief executive, said: “This partnership with Tesco is a further demonstration of the investment we continue to make in our UK consumer business.”