HSBC joins ranks of suitors for Tesco banking arm
HSBC has joined rivals Barclays and Lloyds Banking Group in expressing an interest in the banking arm of supermarket giant Tesco, Sky News learns.
Tuesday 2 January 2024 12:59, UK
HSBC has joined a host of rival high street lenders vying to snap up Tesco Bank as its owner mounts a fresh attempt to offload the business.
Sky News understands that HSBC has submitted an indicative offer for Tesco Bank, which has about five million customers and employs more than 3,500 people.
It was unclear on Tuesday how serious HSBC's interest is, with rival UK banks Barclays and Lloyds Banking Group also reported to have tabled offers.
Tesco's decision to explore a renewed effort to sell its banking operation was revealed by Sky News last February.
One banking industry source said a deal involving one of the big UK banks was unlikely to draw opposition from competition regulators, although it would underline how entrenched the positions of the major high street lenders are 15 years after the financial crisis.
It comes as a wave of consolidation among mid-sized British banks begins to gather pace, with the Co-operative Bank confirming last month that it had entered exclusive talks to be sold to the Coventry Building Society.
Meanwhile, Metro Bank called off talks with Barclays about the sale of a £3bn mortgage book amid valuation disagreements.
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.
It offers products including pet insurance, savings accounts and credit cards.
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The Tesco Bank brand is not expected to form part of any transaction, with the rights to use the name licensed by the supermarket giant which owns the business.
Tesco's potential exit from the banking business comes about 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.
Rival J Sainsbury has also explored the disposal of its banking arm but decided in 2021 to terminate discussions with suitors.
HSBC declined to comment on Tuesday.