Tesco PLC, a supermarket chain based in the United Kingdom, said Monday it will assume full ownership of its financial-services arm by buying the 50% stake owned by the Royal Bank of Scotland. Tesco Personal Finance Group Ltd. offers credit cards, insurance and related products, and it operates a network of about 2,700 ATMs, according to a statement from Tesco. The company will spend £950 million (US$1.9 billion or 1.2 billion euros) for the stake from Royal Bank of Scotland. The bank and supermarket chain created the financial-services arm in 1997 as a joint venture. Tesco expects the arm to generate an estimated pretax profit of £240 million this year, up 16.5% from £206 million last year. The supermarket chain says assuming full ownership will enable the company to "to extend its financial-services business from a collection of popular financial products to that of a full-service retail bank offering more choice, innovation and value to customers, and better returns to shareholders," according to the statement. Tesco claims to have 6.9% of the UK credit card market.
Authoritative analysis and perspective for every segment of the payments industry
Authoritative analysis and perspective for every segment of the industry
Have an account? Sign In