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RBS offers to buy Tesco Bank’s mortgage book

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Written by: Liz Bury
25/06/2019
Royal Bank of Scotland (RBS) has reportedly tabled a bid for Tesco Bank’s mortgage book in what would be its biggest acquisition since the bailout in 2008.

Sky News reported that RBS has bid and that Nationwide has “lodged an interest” in acquiring the Tesco Bank mortgage business.

RBS’s share of the mortgage market currently stands at 11 per cent and its strategy is to grow that.

Tesco Bank said in May that it wants to sell the £3.7bn mortgage book, which has 23,000 customers.

The priority was “to complete a commercially-acceptable transaction with a purchaser who will continue to serve our customers well,” Tesco Bank chief executive Gerry Mallon (pictured) said at the time.

Tesco Bank put the back book on the market after it stopped active lending, with MPs calling for it to sell the book to an active lender. They fear that a sale has the potential to add to the number of mortgage prisoners in the UK.

The Edinburgh-based bank was restricted from making acquisitions as part of the terms of its bailout in 2008. 

It acquired the cloud accounting software firm, FreeAgent, for £50m in 2018.

Tesco Bank and RBS declined to comment. Citi is reported to be handling the sale.

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