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Tesco Bank, which has over 23,000 mortgage customers, has sold its mortgage portfolio to Lloyds Banking Group.
As part of the agreement the entire residential mortgage portfolio and arrangements for the ongoing administration of Tesco Bank’s mortgages will transfer to Halifax, which is owned by Lloyds Banking Group.
Back in May, Tesco Bank announced that it was no longer offering new mortgages and that it was actively looking to sell its mortgage portfolio. While Tesco Bank exiting the market led to less competition within the sector, competition amongst mortgage providers has remained fierce over the last few months and rates continue to be cut across fixed rate terms, as well as the introduction of new 15-year mortgage terms from Virgin Money and Yorkshire Building Society.
Gerry Mallon, Tesco Bank chief executive, said: “In May we announced our decision to stop new mortgage lending while we explored our options to sell the mortgage book.
“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.
“After a thorough process, we are pleased to confirm that we have agreed the sale of our mortgage book to Lloyds Banking Group, operating under the Halifax brand. We are confident that they will continue to provide our customers with an excellent customer experience.”
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