Tesco sells banking unit to Barclays for £600m

(Sharecast News) - UK supermarket giant Tesco has sold its retail banking business to Barclays for £600m, the two companies said on Friday. The duo also unveiled a 10-year partnership to market and distribute credit cards, unsecured personal loans and deposits using the Tesco brand, as well as explore other opportunities to offer financial services to Tesco customers.

Tesco said it expected to rake in a further £100m after the settlement of certain regulatory capital amounts and transaction costs. Combined with the previously announced special dividend of £250m paid by Tesco Bank last August, this is expected to result in total cash received of around £1bn, the majority of which will be returned to shareholders in the form of an incremental share buyback.

Reporting by Frank Prenesti for Sharecast.com