Tesco Plc has started the process for a potential sale of its banking arm, according to people familiar with the matter.
(Bloomberg) — Tesco Plc has started the process for a potential sale of its banking arm, according to people familiar with the matter.
The grocer has appointed Goldman Sachs Group Inc. as its adviser and begun to reach out to potential buyers, the people said, who asked not to be identified discussing a private matter. The undertaking is at an early stage, the people said,
Tesco Bank offers a range of credit cards, personal loans and insurance products to around 5 million customers, according to its website. It reported a total income of £702 million for the half year and had £7.4 billion customer loan book and £6.3 billion of deposits at the end of August, Tesco said in a filing earlier this month.
Spokespeople for Tesco and Goldman declined to comment.
The potential sale adds to the list of mid-sized lenders in the UK in flux. The Co-Operative Bank is also evaluating a possible sale while Metro Bank recently secured a rescue package this month.
Read More: UK Challenger Banks Head for a Reckoning After Metro’s Troubles
Any transaction could free up some capital for Tesco, which is the largest grocer in the UK. It has been grappling with rising costs and competition from discounters such as Germany’s Aldi.
–With assistance from Deirdre Hipwell.
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