Tesco Bank To Sell Mortgage Portfolio To Lloyds Banking For £3.8 Bln

(RTTNews) - Tesco plc (TSCO.L, TSCDY.PK) announced Tuesday that Tesco Personal Finance Plc. or Tesco Bank is selling its mortgage portfolio to Lloyds Banking Group plc (LLOY.L, LYG) for a cash consideration of about 3.8 billion pounds.

Tesco Bank has over 23,000 mortgage customers. The mortgage portfolio has a lending balance of about 3.7 billion pounds and generated directly attributable pre-tax profits of 9.1 million pounds in the 2019 financial year.

As part of the sale, Tesco Bank's entire residential mortgage portfolio and arrangements for the ongoing administration will transfer to Halifax, a division of Bank of Scotland plc, which is a subsidiary of Lloyds Banking.

It is anticipated that beneficial ownership will transfer at the end of September 2019 with legal title occurring by the end of March 2020.

The company in May had announced its decision to stop new mortgage lending while it explored options to sell the mortgage book.

Tesco said the sale is in line with Tesco Bank's strategy of focusing on a reduced number of products and services. It will also reduce operating and funding costs.

The sale proceeds will be used for re-investment into customer offer, ongoing transformation of the business and re-balancing of retail and wholesale funding sources.