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Tesco Bank

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Tesco Personal Finance plc
FormerlyTesco Personal Finance Limited (1997–2008)[1]
Company typePrivate
IndustryFinance and insurance
PredecessorTesco Personal Finance
FoundedJuly 1997; 27 years ago (July 1997)
HeadquartersEdinburgh, Scotland, UK
Key people
Gerry Mallon, CEO
ProductsFinance and insurance
Mortgages
Credit Cards
RevenueIncrease £1.075 billion (2013/14)[2]
Increase £194.6 million (2013/14)[2]
Total assetsIncrease £8.605 billion (2013/14)[2]
Number of employees
3,900 [3]
ParentBarclays
SubsidiariesTesco Compare
Websitetescobank.com
Footnotes / references
Tesco purchase of RBS stake completed 2008 Q4

Tesco Personal Finance plc, trading as Tesco Bank, is a British retail bank which was formed in July 1997 (as Tesco Personal Finance). The bank was formed as part of a 50:50 joint venture between The Royal Bank of Scotland and Tesco, the largest supermarket in the United Kingdom, employing 2,800 people.

Tesco later acquired Royal Bank of Scotland shareholding, which resulted in the bank becoming a wholly owned subsidiary, and now operates under its own banking license under the Financial Services Compensation Scheme.[4] The bank offers a range of insurance, credit cards, loans, savings, mortgages and travel products. Tesco Bank also launched a current account in June 2014, but has stopped accepting new current account applications in 2019, and all existing current accounts were closed in November 2021. This was due to very few customers using their current account as their main account.

Tesco Bank customers can accumulate Tesco Clubcard points when they purchase finance products.

History

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Prior to the formation of Tesco Personal Finance plc, Tesco had a banking joint venture with NatWest, which ended in February 1997.[5] TPF was formed in July 1997, following the successful launch of Sainsbury's Bank by its main competitor, Sainsbury's. The bank was launched as a joint venture with the Royal Bank of Scotland, which processed all its financial transactions.[6]

Subsidiary companies of the Royal Bank, such as Direct Line, UKI and Lombard Direct helped Tesco Personal Finance provide insurance products. In July 2008, Tesco announced that they were buying out the Royal Bank of Scotland's 50% stake in the company for £950 million, and the transaction was completed later that year.[7][8] In October 2009, Tesco Personal Finance was renamed Tesco Bank.[9]

In February 2024, Barclays announced the acquisition of the bank's credit cards, loans and savings operations for £700 million, with Tesco retaining its insurance, ATMs, travel money and gift card operations.[10][11]

Services

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Tesco Bank provides a range of personal accounts, including credit cards, loans, savings accounts, insurance and foreign currency exchange. Mortgages were added in August 2012,[12] after briefly offering products provided by First Active in November 2004.[13][14] The bank confirmed in December 2013 that it planned to launch a current account,[15][16] and the first account was launched on 10 June 2014.[17] Tesco Bank launched its first mobile app in 2014, supporting its core transactional products (Current and Savings accounts as well as Credit cards). In subsequent years it launched a number of innovative features including “balance peek” in 2015 and was the first bank in the world to deploy an app for Apple Watch at its launch in 2015.[18]

Tesco Bank sold its mortgage portfolio to Lloyds Banking Group in September 2019,[19] and in February 2020, the bank also decided to stop offering current accounts to new customers.[20] On 26 July 2021, Tesco Bank announced it will be closing all current accounts held by its customers, citing "limited activity".[21]

Locations

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The bank is registered in Scotland at 2 South Gyle Crescent, Edinburgh EH12 9FQ. While operating as a joint venture, the bank shared its registered office with RBS at St Andrew Square, Edinburgh. In July 2010, Tesco Bank opened two major offices at Quorum Business Park in Newcastle, and a larger one at Broadway One in Glasgow. Since then, there has also been an office opened in South Gyle, Edinburgh.

During March 2009, Tesco initiated a plan to roll out in store branches, under the Tesco Bank branding.[22][23] On 14 May 2016, Tesco Bank closed all three remaining branches, with a focus on being a completely online bank.[24]

In addition, there are over three hundred Tesco Travel Money Bureaux, an in store bureau de change, managed by a joint venture with Travelex.[25]

Fraud incident 2016

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On 6 November 2016, British newspapers reported that customers of Tesco Bank were reporting that hundreds or in some cases thousands[26] of pounds had been lost from their accounts, with some reporting unauthorised card transactions originating in Brazil.[26] The following day, the bank suspended online transactions, and made a statement saying up to 40,000 customers had been affected.[27]

Shares in the retails group fell 3% on the news.[28] On Tuesday 8 November, the chief executive of the UK Financial Conduct Authority was asked for a summary of the issue by a Parliamentary committee, and said of the attack that "There are elements of this that look unprecedented and it is serious, clearly".[29] The bank declared that the cyber attack resulted in the loss of £2.5 million.[30] Later, United Kingdom's Financial Conduct Authority asked the bank to pay £16.4 million as the penalty.[31]

References

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  1. ^ "TESCO PERSONAL FINANCE PLC overview – Find and update company information – GOV.UK". Companies House. 5 March 1997. Retrieved 6 August 2023.
  2. ^ a b c "Tesco Personal Finance Plc (Tesco Bank)" (PDF). Investec Capital Markets. 2012. Retrieved 30 May 2013.
  3. ^ "Tesco Bank key facts". Tesco PLC. 2012. Retrieved 30 May 2013.
  4. ^ "Bank Licence List – Investor Protection Compensation Scheme (Revised July 2013)". Financial Advice.net. 2013. Retrieved 1 December 2013.
  5. ^ Rodgers, Peter (14 February 1997). "Tesco cuts NatWest tie to link with Royal Bank". The Independent. Retrieved 30 May 2013.
  6. ^ "Annual report and financial statements 1998" (PDF). Tesco PLC. 1998. Retrieved 30 May 2013.
  7. ^ "Tesco Pays £950m To Become Bank". Sky News. 28 July 2008. Retrieved 28 July 2008.
  8. ^ Thelwell, Emma; Butterworth, Myra (28 July 2008). "Tesco eyes mortgages and current accounts in plan to take on UK's high street banks". The Telegraph. Retrieved 28 July 2008.[dead link‍]
  9. ^ "Tesco Bank to offer current accounts and mortgages". The Telegraph. 6 October 2009. Archived from the original on 9 October 2009. Retrieved 6 October 2009.
  10. ^ Ralph, Oliver (9 February 2024). "Barclays to buy most of Tesco's banking business for £600mn". Financial Times. Retrieved 9 February 2024.
  11. ^ Strydom, Martin (9 February 2024). "Barclays buys Tesco Bank for £600m". The Times. ISSN 0140-0460. Retrieved 9 February 2024.
  12. ^ "Tesco Bank will offer mortgages". BBC News. 4 August 2012. Retrieved 30 May 2013.
  13. ^ Murray-West, Rosie (4 August 2012). "Tesco Bank finally launches first range of mortgages". The Telegraph. Retrieved 30 May 2013.
  14. ^ "Tesco launches mortgages". www.theguardian.com. 2 November 2004. Retrieved 1 May 2020.
  15. ^ "Tesco Bank Creates 300 Scottish Jobs as Lender Eyes Current Account Launch". International Business Times UK. 2013. Retrieved 15 December 2013.
  16. ^ "Tesco's Bank Adds Checking Accounts, 300 Employees". The Wall Street Journal. 2013. Retrieved 15 December 2013.
  17. ^ "Tesco enters battle for current accounts". BBC News. 10 June 2014. Retrieved 12 June 2014.
  18. ^ "Tesco Bank enables balance check on Apple Watch". Finextra Research. 27 April 2015. Retrieved 19 August 2021.
  19. ^ "Lloyds buys Tesco Bank's mortgage book in £3.8bn deal". Financial Times. 3 September 2019. Retrieved 19 April 2020.
  20. ^ "Tesco Twitter Status". Tesco Bank. 2020. Retrieved 19 April 2020.
  21. ^ "Tesco Bank to close all its current accounts". BBC News. 26 July 2021. Retrieved 26 July 2021.
  22. ^ "In-store 'Tesco Bank' branches planned". Which?. 30 March 2009. Retrieved 30 May 2013.
  23. ^ Bradshaw, Tim (29 March 2009). "Tesco to open bank branches in its stores". Financial Times. Retrieved 29 March 2009.
  24. ^ "Tesco Bank". www.relbanks.com. Retrieved 19 August 2021.
  25. ^ "Travel Money In Store". Tesco Bank. 2013. Retrieved 30 May 2013.
  26. ^ a b Booth, Robert (6 November 2016). "Thousands of Tesco Bank accounts compromised by fraud". The Guardian. ISSN 0261-3077. Retrieved 23 September 2020.
  27. ^ "Tesco Bank Freezes Accounts in Attack Investigation". Info Security. 2016. Retrieved 8 November 2016.
  28. ^ Botter, Lisa. "Tesco shares fall after cyber attack at its online banking group hits 40,000 customers". TheStreet. Retrieved 23 September 2020.
  29. ^ "Tesco Bank cyber raid 'unprecedented', says financial regulator". The Guardian. 2016. Retrieved 8 November 2016.
  30. ^ Treanor, Jill (8 November 2016). "Tesco Bank cyber-thieves stole £2.5m from 9,000 people". The Guardian. Retrieved 20 September 2018.
  31. ^ Stein, Mara Lemos (1 October 2018). "U.K.'s Tesco Bank Fined $21.4 Million Over Cyberbreach". Wall Street Journal. ISSN 0099-9660. Retrieved 2 October 2018.
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