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Gloucestershire Business News

Tesco sells mortgage arm to Lloyds

Tesco Bank has sold its mortgage business to Lloyds Banking Group for £3.8bn, with 23,000 customers set to switch to a new provider.

The retail giant stopped mortgage lending in May. It said the portfolio made pre-tax profits of £9.1m last year and it has lent its mortgage customers £3.7bn, as reported by City AM.

However, it said that after overheads and other costs, the mortgage side of the business made an 'immaterial' contribution to Tesco's overall profits.

Mortgage customers will be transferred from Tesco Bank to Halifax, a division of Bank of Scotland, which is a subsidiary of Lloyds, which has a headquarters in Barnwood. The transfer will take place at the end of this month.

The move is part of Tesco's plan to stay strong during a tough time for retail, by simplifying its business and selling off non-core arms such as mortgages.

Tesco Bank said its priority was to find a purchaser which will continue to serve its mortgage customers well. It is confident that Lloyds Banking Group and Halifax will provide an excellent customer experience.

Lloyds said it expects the new portfolio to generate good returns for the company.

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