Tuesday 15 October 2019

Tesco Bank halts mortgages blaming 'challenging' conditions

Gerry Mallon, CEO of Tesco Bank
Gerry Mallon, CEO of Tesco Bank
Independent.ie Business Desk

Tesco Bank is to sell off its mortgage portfolio after halting new lending, in a move which could affect more than 23,000 customers.

The bank announced on Tuesday that it had ceased new mortgage lending and was actively exploring options to sell its existing portfolio, which has total lending balances of £3.7bn.

Chief executive Gerry Mallon, who previously served as CEO of Ulster Bank in Ireland, blamed recent challenging market conditions and said the move was part of a strategic decision to "focus on serving a broader range of customers in more specific areas".

"We have therefore chosen to cease lending to new customers and announce our intention to explore a sale of our portfolio," he said.

"Our priority in any sale is to complete a commercially acceptable transaction with a purchaser who will continue to serve our customers well."

The bank warned there was no certainty of a transaction, nor of the terms which might be attached to it.

Tesco Bank has offered mortgages since 2012 and currently serves in excess of 23,000 customers. Customers are able to collect Clubcard points when repaying their loans.

The shift comes after PA revealed this month that Tesco Bank has quietly dropped its travel insurance offer, following the likes of John Lewis.

The bank is also set to slash the interest rate on its current account from 3pc to 1pc next month.

PA Media

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