Tesco explores banking division sale, enlists Goldman Sachs as adviser

Britain’s retail giant Tesco (LSE: TSCO) is considering a potential sale of its banking arm, as reported by Bloomberg↗︎. The company has enlisted the expertise of Goldman Sachs Group to guide them through this strategic financial move, aiming to identify suitable buyers for the unit.

The FTSE 100 listed supermarket chain ventured into the banking sector in 1997, initially through a 50-50 partnership with the Royal Bank of Scotland. Tesco assumed complete control of the banking division in 2008, marking a significant step in its financial services journey.

According to insiders cited by Bloomberg, the sale process is in its early phases, signifying Tesco’s cautious approach towards divesting this key business segment. Over the years, Tesco has streamlined its banking services, having previously sold the bank’s mortgage portfolio to Lloyds Banking Group for £3.8 billion. Furthermore, the company withdrew from the current account market, narrowing its focus on specific financial products.

Despite these strategic shifts, Tesco’s banking division continues to serve approximately five million customers. The services offered encompass a wide spectrum, ranging from insurance products to savings accounts, credit cards, and personal loans, catering to the diverse financial needs of its client base.

Tesco’s shares showed a minor dip of 0.4%, trading at 275.00 pence each in London on Wednesday morning.