Britain’s biggest retailer Tesco said on Friday it would sell most of its banking operations to lender Barclays for up to 700 million pounds ($883 million).
The supermarket group said the majority of the proceeds would be returned to shareholders through an additional share buyback.
The deal will see Tesco sell its existing banking operations in credit cards, loans and savings, removing 7.7 billion pounds of capital-intensive assets and 6.7 billion pounds of financial liabilities from its balance sheet.
Tesco will retain all other existing activities of Tesco Bank, including insurance, ATMs, travel money and gift cards, which are capital-light.
Tesco and Barclays have also formed a strategic partnership, initially for 10 years, that will see Barclays offer Tesco-branded banking products and services.
Reuters had reported in November that Barclays had been exploring a potential acquisition of Tesco’s banking operations.
($1 = 0.7925 pounds) (Reporting by Yadarisa Shabong in Bengaluru and James Davey in London; Editing by Rashmi Aich)
