Lloyds to buy Tesco Bank mortgages for around £3.8bn

Lloyds Banking Group has fought off a raft of rivals to snap up Tesco Bank’s mortgage business for around £3.8 billion.

The deal will see more than 23,000 residential mortgage customers transfer to Lloyds-owned business Halifax in a move cementing the bank’s position as Britain’s biggest lender.

The sale of the portfolio, which has a lending balance of around £3.7 billion, is expected to be completed by the end of March next year.

It comes after Tesco Bank said in May it was stopping new mortgage lending and put the business up for sale amid challenging market conditions.

Gerry Mallon, Tesco Bank chief executive, said: “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.

“As a result, we made the decision to move away from our mortgage offering.

“Our priority throughout has been to complete a commercially acceptable transaction with a purchaser who will continue to serve our customers well.”