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Barclays (BCS) Bids to Acquire Tesco's Banking Business
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In sync with its strategy to improve market share in the U.K., Barclays (BCS - Free Report) is potentially looking to acquire Edinburgh-based Tesco Bank. This was first reported by Reuters, citing persons familiar with the matter.
BCS seems to have already made a bid for Tesco Bank, formed in 1997 through a 50-50 joint venture between Royal Bank of Scotland (now known as NatWest Group plc) and Britain’s large food retailer Tesco Plc. In 2008, Tesco Plc took full ownership of the venture.
Barclays is primarily interested in Tesco Bank’s credit card and savings account products. The deal offers an opportunity to cross-sell products to Tesco Plc’s huge retail customer base.
This February, Tesco Plc noted that its financial services business is under review and then appointed global investment bank Goldman Sachs to seek potential buyers. Notably, Tesco Bank stopped offering current account services in 2020, while in September 2019, it divested its mortgage portfolio to Lloyds Banking Group plc for £3.8 billion.
While the value for Tesco Bank could not be determined, the business earned around £57 million in pre-tax income for six months ended Aug 31, 2023. The business had approximately £1.5 billion as book value of the same date.
Amid the current challenging operating backdrop, the deal will bolster presence in the lucrative retail banking business for Barclays. Earlier this year, it acquired specialist mortgage lender Kensington Mortgages.
So far this year, shares of BCS have lost 7.7% on the NYSE against the industry’s 10.2% rally.
Image Source: Zacks Investment Research
Currently, Barclays carries a Zacks Rank #4 (Sell).
Another major global bank, HSBC Holdings (HSBC - Free Report) , is looking to expand in Asia. In sync with this, last month, the company announced a deal to acquire Citigroup's (C - Free Report) retail wealth management business in China.
As a result of the sale, Citigroup will transfer assets under management and deposits worth almost $3.6 billion (as of August 2023) and the associated wealth customers in 11 major cities to HSBC Bank China. Upon completion (expected in the first half of 2024), the acquired business will become part of HSBC Bank China’s Wealth and Personal Banking operations. Citigroup will retain its institutional businesses where it has a preeminent position.
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Barclays (BCS) Bids to Acquire Tesco's Banking Business
In sync with its strategy to improve market share in the U.K., Barclays (BCS - Free Report) is potentially looking to acquire Edinburgh-based Tesco Bank. This was first reported by Reuters, citing persons familiar with the matter.
BCS seems to have already made a bid for Tesco Bank, formed in 1997 through a 50-50 joint venture between Royal Bank of Scotland (now known as NatWest Group plc) and Britain’s large food retailer Tesco Plc. In 2008, Tesco Plc took full ownership of the venture.
Barclays is primarily interested in Tesco Bank’s credit card and savings account products. The deal offers an opportunity to cross-sell products to Tesco Plc’s huge retail customer base.
This February, Tesco Plc noted that its financial services business is under review and then appointed global investment bank Goldman Sachs to seek potential buyers. Notably, Tesco Bank stopped offering current account services in 2020, while in September 2019, it divested its mortgage portfolio to Lloyds Banking Group plc for £3.8 billion.
While the value for Tesco Bank could not be determined, the business earned around £57 million in pre-tax income for six months ended Aug 31, 2023. The business had approximately £1.5 billion as book value of the same date.
Amid the current challenging operating backdrop, the deal will bolster presence in the lucrative retail banking business for Barclays. Earlier this year, it acquired specialist mortgage lender Kensington Mortgages.
So far this year, shares of BCS have lost 7.7% on the NYSE against the industry’s 10.2% rally.
Image Source: Zacks Investment Research
Currently, Barclays carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Another major global bank, HSBC Holdings (HSBC - Free Report) , is looking to expand in Asia. In sync with this, last month, the company announced a deal to acquire Citigroup's (C - Free Report) retail wealth management business in China.
As a result of the sale, Citigroup will transfer assets under management and deposits worth almost $3.6 billion (as of August 2023) and the associated wealth customers in 11 major cities to HSBC Bank China. Upon completion (expected in the first half of 2024), the acquired business will become part of HSBC Bank China’s Wealth and Personal Banking operations. Citigroup will retain its institutional businesses where it has a preeminent position.