Tesco Bank to pull out of mortgage market

The bank, which started offering mortgages in 2012, has more than 23,000 mortgage customers, who have total lending balances of £3.7bn. Any sale would involve the complete transfer of related balances and ongoing administration of relevant accounts, it said.

Tesco Bank stressed that there is no certainty that any transaction will result from its exploration of options to sell its existing mortgage portfolio.

There will be no impact on customers who already have mortgages, Tesco Bank said.

Gerry Mallon, chief executive of Tesco Bank, said: “In recent years, challenging market conditions have limited profitable growth opportunities. 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.

“To that end, we have made the strategic decision to focus on serving a broader range of customers in more specific areas, which means moving away from our mortgage offer. We have therefore chosen to cease lending to new customers and announce our intention to explore a sale of our portfolio. Our priority in any sale, is to complete a commercially acceptable transaction with a purchaser who will continue to serve our customers well.”