1 November
2024
Barclays
PLC
Completion of the acquisition
of Tesco's retail banking business and commencement of long-term
strategic partnership with Tesco
Barclays PLC ("Barclays") today
announces that, further to the announcement on 9 February 2024,
Barclays Bank UK PLC ("Barclays UK") has successfully completed the
acquisition of the retail banking business of Tesco Personal
Finance plc ("TPF", operating using the trading name "Tesco
Bank"). The acquired business includes credit cards,
unsecured personal loans, deposits and the operating infrastructure
which, following completion of the acquisition, will continue to be
operated under the ownership and management of Barclays
UK.
In conjunction with completion of
the acquisition, Barclays UK has entered into a long-term,
exclusive strategic partnership with Tesco Stores Limited for an
initial period of 10 years to market and distribute credit cards,
unsecured personal loans and deposits using the Tesco brand, as
well as explore other opportunities to offer financial services to
Tesco customers through Tesco's distribution channels and on the
open market.
This partnership builds on Barclays
UK's existing strategic partnerships with other leading UK retail,
consumer electronics and loyalty programme brands. Following
completion of the transaction, the business will continue to
operate under the "Tesco Bank" brand, under the management of
Barclays UK.1
C.S. Venkatakrishnan, Group Chief
Executive of Barclays, commented:
"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."
Vim Maru, Chief Executive of
Barclays UK, commented:
"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."
Ken Murphy, Group Chief Executive of
Tesco, commented:
"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."
The consideration payable by
Barclays UK at completion was £0.6 billion, subject to customary
post-completion purchase price adjustments. Tangible net
assets of the acquired business at completion were £1.0
billion2, comprising, inter alia, of £4.2 billion of
gross credit card receivables and £4.2 billion of gross unsecured
personal loans, together with £6.8 billion in customer
deposits. The transaction is expected to result in the
recognition of an estimated pre-tax profit of c. £0.3
billion3 in the fourth quarter of 2024 generating a c.
50 basis points benefit for FY 2024 Group RoTE. The
transaction has been financed from Barclays' existing cash
resources and is estimated to reduce the Barclays Group's CET1
ratio by c. 20 basis points4 primarily as a result of
the addition of c. £7 billion of risk weighted assets.
Barclays UK will integrate the
acquired Tesco Bank business over time and the transaction is
expected to be accretive to Group RoTE post integration.
Notes: Figures are rounded for
disclosure purposes and may not sum.
(1)
TPF will retain some parts of the existing "Tesco Bank"
business, related to insurance and money services (including gift
cards, travel money and ATMs), which will be rebranded over the
next two years.
(2)
Based on estimated TPF accounting values prior to fair value
accounting (IFRS 3).
(3)
Based on provisional asset and liability fair value estimates,
purchase price allocation estimates and resulting negative goodwill
(post-completion finalisation expected by publication of Barclays'
Full Year 2024 Results). Includes recognition of gain on
acquisition (negative goodwill) of c. £0.5 billion and expected
post-acquisition impairment charge of c. £(0.2) billion in relation
to IFRS 9 (Stage 2 balances from TPF that are treated as Stage 1 on
acquisition and subsequently reassessed) (together "Day 1 P&L
Impact").
(4)
Based on the Barclays Group's CET1 ratio of 13.8% as at 30
September 2024. Includes Day 1 P&L Impact.
- Ends -
For further information, please
contact:
Investor Relations
Media Relations
Marina Shchukina
Jon Tracey
+ 44 (0) 207 116 2526
+44 (0) 7552214868
About Barclays
Our vision is to be the UK-centred
leader in global finance. We are a diversified bank with
comprehensive UK consumer, corporate and wealth and private banking
franchises, a leading investment bank and a strong, specialist US
consumer bank. Through these five divisions, we are working
together for a better financial future for our customers, clients
and communities.
For further information about
Barclays, please visit our website home.barclays
Forward-looking statements
This announcement contains
forward-looking statements within the meaning of Section 21E of the
US Securities Exchange Act of 1934, as amended, and Section 27A of
the US Securities Act of 1933, as amended, with respect to the
Barclays Group. Barclays cautions readers that no forward-looking
statement is a guarantee of future performance and that actual
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financial condition and performance are identified in Barclays
PLC's filings with the US Securities and Exchange Commission
("SEC") (including, without limitation, Barclays PLC's Annual
Report on Form 20-F for the fiscal year ended 31 December 2023),
which are available on the SEC's website at www.sec.gov. Subject to
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any relevant jurisdiction (including, without limitation, the UK
and the US), in relation to disclosure and ongoing information,
Barclays undertakes no obligation to update publicly or revise any
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future events or otherwise.