Tesco reportedly looking to offload banking unit

Tesco is reportedly in the process of exploring a sale of its banking business.

According to sources cited by Bloomberg, the UK supermarket has appointed Goldman Sachs as its adviser and has started reaching out to potential buyers. The timeline for a sale of Tesco Bank is unclear, as is the name of any potential buyer.

Tesco Bank currently has around 5 million customers and offers services including credit cards, personal loans and insurance. The supermarket said earlier this month that the banking business reported total income of £702 million for the half year.

Tesco joins grocery rival The Co-Operative in exploring a possible sale of its banking business. Mid-sized challenger banks in the UK more broadly are struggling, with Metro Bank earlier this month having to secure a rescue package. Others like Vanquis and Paragon have seen low levels of trading over the summer.

Elsewhere, Tesco is preparing to relaunch Paperchase in store and online after rescuing the business from administration earlier this year. Branding has started to go up in several stores across the UK.

In comments to Retail Gazette, a spokesperson for the supermarket said: “Having acquired the Paperchase brand back in January, we look forward to bringing this well-loved name to Tesco and are excited to launch a range of Paperchase products in selected stores and online in the coming weeks.”

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