Tesco announced today that it intends to return £700 million to shareholders through an incremental share buy-back, RTÉ reported last week.
The announcement comes as the UK’s largest supermarket group completes its banking operations sale to Barclays.
Tesco expects the new buy-back programme, announced last week, to start after the completion of the current £1 billion share buy-back.
In February, the companies announced the sale, worth about £600 million.
The group announced today that the sale to Barclays – consisting of most of Tesco’s banking operations, credit cards, loans and savings – is now almost complete.
This transfer was expected to add £8.3 billion in unsecured loans and £6.7 billion in deposits to the bank.
Tesco, in turn, planned to retain other activities of its banking, including ATMs, insurance, travel money and gift cards.
Barclays and Tesco formed a strategic partnership – initially for ten years – that will see the bank offer Tesco-branded banking products and services.
The bank will also use Tesco’s Clubcard loyalty scheme, while the retailer will receive fees of £50 million a year.
Tesco noted in February that it expected to make an annual adjusted operating profit of £80 million to £100 million from the partnership and retained activities.
This is more than half the year’s expected profits from Tesco Bank.
Read More: Tesco UK Lifts Profit Outlook Following Strong First Half
