Royal Bank of Scotland agrees £950 million deal with Tesco

Jul 28 2008

Bank sells its stake in Tesco Personal Finance

Supermarket Tesco has agreed a s950 million deal with Royal Bank ofScotland to take full control of the pair's Tesco Personal Finance joint venture.

Tesco said full ownership would enable it "over time" to extend itsfinancial services business from a collection of products to a fullservice retail bank.

The business will be led by Benny Higgins, who has run the retail banking divisions of both RBS and Halifax Bank of Scotland.

The headquarters of the business are expected to remain in Edinburgh with around 200 staff head office staff also due to transferto supermarket.

RBS chief executive Sir Fred Goodwin said Tesco Personal Finance was now a "strong and successful joint venture".

He said: "At this stage of its maturity it is appropriate forTesco Personal Finance to move to single ownership for the next stageof its growth."

RBS recently raised s12 billion from a rights issue with the sale another way of bolstering its balance sheet.