(qlmbusinessnews.com via news.sky.com– Tue, 3rd Sept 2019) London, Uk – –
Tesco Bank's 23,000 mortgage customers are set to transfer to Halifax once the deal is completed next year.
Lloyds Banking Group has completed the purchase of Tesco Bank's mortgage book in a deal worth £3.8bn.
Sky News reported in July how the high street giant had fought off rivals including RBS to enter exclusive talks for the business, three months after Tesco said it planned an exit because of challenging market conditions.
The deal will see more than 23,000 residential mortgage customers transfer to Lloyds-owned business Halifax – cementing the bank's position as Britain's biggest lender.
It is expected to be completed by the end of March next year.
Gerry Mallon, Tesco Bank chief executive, said: “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.”
A sluggish housing market and low interest rates have helped spark a race to the bottom in mortgages amid strong competition for business between high-street lenders – a fight that has taken its toll on profitability over the past year.
Banks across the board have been reporting weaker margins from intense competition in the mortgage market – though smaller banks have endured the worst of the pain as a result of the weak rates.
Vim Maru, group director of retail at Lloyds Banking Group, said: “This is a good deal for the group, our shareholders and Tesco's mortgage customers.
“We believe our Halifax brand will make a good home for these customers and we look forward to welcoming them to the group.”
Tesco has previously said its mortgage customers needed to take no action as there would be no changes to their accounts.