Tesco reportedly considering sale of banking arm

Supermarket giant Tesco is considering selling its banking arm, according to Sky News.

The publication reported that the supermarket is reviewing Tesco Bank, but according to insiders this is still at a very early stage, and may not lead to a formal sale.

Another source added that a partial sale or joint venture might also be considered.

According to the report, Tesco is looking to bring in Goldman Sachs to advise on the future of its banking arm, which currently has more than five million customers.

Tesco Bank, which launched in 1997 and generated adjusted operating profits of £67m in its last half-year results, shared in its most recent results announcement that its balance sheet “remains strong”.

It added that it continues to have “sufficient capital and liquidity to absorb changes in both regulatory and funding requirements”.

Sky News confirmed that there is no suggestion the review into the business might result in job losses or any kind of wind-down.

Rival J Sainsbury has also recently explored cutting its banking arm, but decided against it in 2021.

Tesco did not reply to AltFi’s request for comment at the time of publication.