Tesco Bank agrees £3.8bn deal with Lloyds Group to sell mortgage business
Lloyds Banking Group has fought off a raft of rivals to snap up Tesco Bank's mortgage business for around £3.8bn.
The deal will see more than 23,000 residential mortgage customers transfer to Lloyds-owned business Halifax in a move cementing the bank's position as Britain's biggest lender.
The sale of the portfolio, which has a lending balance of around £3.7bn, is expected to be completed by the end of March next year.
It comes after Tesco Bank announced in May that it was stopping any new mortgage lending and put the business up for sale amid challenging market conditions.
Speaking yesterday, Belfast man Gerry Mallon, who was appointed chief executive of Tesco Bank last year, said: "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.
"As a result, we made the decision to move away from our mortgage offering.
"Our priority throughout has been to complete a commercially acceptable transaction with a purchaser who will continue to serve our customers well."
But there has been concern among Tesco Bank's home loan customers that the sale will spell the end of their ability to earn Tesco Clubcard loyalty points through mortgage payments.
Lloyds beat high street competitors including Santander and Royal Bank of Scotland to secure the portfolio.