RBS sells stake in Tesco Personal Finance for £950m

  • Story by: Sharon Flaherty
  • Magazine: FTAdviser
  • Published Monday , July 28, 2008

The Royal Bank of Scotland Group (RBS) has agreed to sell its 50 per cent shareholding in Tesco Personal Finance to its joint venture partner, Tesco plc, for a cash consideration of £950m.

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As part of the transaction, RBS will continue to provide certain commercial services to Tesco Personal Finance (TPF) after completion.

Sir Fred Goodwin, group chief executive, said: "Over the last 10 years RBS and Tesco have built a strong and successful joint venture.

"At this stage of its maturity it is appropriate for TPF to move to single ownership for the next stage of its growth and we wish them well with their future plans"

The sale is subject to regulatory approvals, but completion is expected to take place before the end of the year.

TPF was established in 1997 as a joint venture between Tesco Plc and RBS. TPF has since built up 5.5 million customer accounts and now offers more than 25 different products.

In the year to 31 December 2007, TPF reported profit before tax of £206m and total assets (net of intra-group funding) of £4.5bn.

RBS anticipates a profit on disposal on completion of approximately £500m.

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