Lloyds buys Tesco Bank’s mortgage book in £3.8bn deal
Lloyds Banking Group has agreed to buy Tesco Bank’s mortgage book in a £3.8bn deal, representing a 2.5% premium compared to the loans’ outstanding book value. Tesco’s 23,000 customers will transfer to Lloyds subsidiary Halifax in a deal that is expected to be completed by the end of March 2020. Lloyds reportedly beat competitors including Santander and Royal Bank of Scotland to secure the portfolio. The portfolio generated customer income of £81m and a pre-tax profit of £9.1m in the year to February. Lloyds said the new portfolio would achieve “good returns” for the company, “in excess of current organic market opportunities”. Tesco Bank said it is writing to customers to outline what the switch to Halifax will mean to them.