Tesco said today that it intends to return £700 million to shareholders through an incremental share buyback, 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 buyback programme, announced last week, to start after the completion of the current £1 billion share buyback.
In February, the companies announced the sale, worth about £600 million.
The group said 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 of unsecured loans and £6.7 billion of deposits to the bank.
Tesco, in turn, planned to retain other activities of their 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 said in February that it expected to make annual adjusted operating profit from the partnership and retained activities of £80 million to £100 million.
This is more than half the year’s expected profits from Tesco Bank.
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