Tesco Bank sells mortgage book to Lloyds Banking Group
Tesco Bank has sold its mortgage portfolio to Lloyds Banking Group in a £3.8bn deal.
The Bank launched into the mortgage market in 2012 and has over 23,000 mortgage customers.
It announced its decision to stop mortgage lending in May and MPs urged the Bank to sell its mortgage book to an active lender.
As part of the sale, the entire residential mortgage portfolio and arrangements for the ongoing administration will transfer to Halifax, part of the Lloyds Banking Group. It is anticipated that beneficial ownership will transfer at the end of September 2019 with legal title occurring by the end of March 2020.
The mortgage portfolio generated directly attributable pre-tax profits of £9.1m in the 2018/19 financial year.
Gerry Mallon, chief executive of Tesco Bank, said: “In May we announced our decision to stop new mortgage lending while we explored our options to sell the mortgage book.
“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.
“After a thorough process, we are pleased to confirm that we have agreed the sale of our mortgage book to Lloyds Banking Group, operating under the Halifax brand. We are confident that they will continue to provide our customers with an excellent customer experience.”
Source: Financial Reporter