Tesco Plc - Tesco Bank to cease new mortgage lending
Tesco Bank has today announced that it has ceased new mortgage lending and is actively exploring options to sell its existing mortgage portfolio, including the complete transfer of related balances and ongoing administration of relevant accounts. The Bank, which has offered mortgages since 2012, currently serves over 23,000 customers with total lending balances of £3.7bn.
Gerry Mallon, Chief Executive Tesco Bank said:
"In recent years, challenging market conditions have limited profitable growth opportunities. Our focus is on how we best serve Tesco customers and align our resources effectively to their needs while ensuring that our offer remains sustainable in the long term.
"To that end, we have made the strategic decision to focus on serving a broader range of customers in more specific areas, which means moving away from our mortgage offer. We have therefore chosen to cease lending to new customers and announce our intention to explore a sale of our portfolio. Our priority in any sale, is to complete a commercially acceptable transaction with a purchaser who will continue to serve our customers well".
There is no certainty that any transaction will result from Tesco Bank's exploration of options to sell its existing mortgage portfolio, nor as to the terms on which it might be transacted. A further announcement will be made in due course should this be required at the relevant time. Until such time, the sale process remains confidential. If a transaction is confirmed, Tesco Bank will notify existing customers to explain what the sale means for their account.