Sale of Tesco Bank leads to share buyback

Tesco will return £700 million to shareholders after completing the sale of its banking business to Barclays.

Britain’s largest supermarket group said it would begin share buybacks after completing an earlier £1 billion buyback program that is still ongoing.

Shares rose almost 1.7 percent, or 5.8p, to 348p yesterday. They are up 20 percent so far this year.

Investors have been attracted by record profits and growing market share – despite fierce competition from discount rivals Aldi and Lidl since the cost of living crisis.

The grocer has now entered into a ten-year partnership with Barclays, which will supply banking products under the Tesco brand.

Barclays has paid around £600 million for Tesco’s credit cards, unsecured personal loans and savings business.

The supermarket continues to operate its own insurance business, as well as ATMs and travel money services.

Vim Maru, CEO of Barclays’ UK operations, added: “We will bring together the strengths of both businesses, which will benefit customers and colleagues.”