Lloyds Banking Group PLC Acquisition of Tesco Bank's Mortgage Portfolio
03 Settembre 2019 - 08:31AM
Dow Jones News
TIDMLLOY
RNS Number : 0184L
Lloyds Banking Group PLC
03 September 2019
3 September 2019
LLOYDS BANKING GROUP TO ACQUIRE TESCO BANK'S UK RESIDENTIAL
MORTGAGE PORTFOLIO
Lloyds Banking Group plc (the 'Group') announces today that
Halifax has entered into an agreement with Tesco Personal Finance
plc ('Tesco Bank') to acquire Tesco Bank's prime GBP3.7 billion UK
residential mortgage portfolio.(1)
As part of the transaction, we welcome over 23,000 mortgage
customers who will be transitioning from Tesco Bank. Halifax has a
proven track record in serving and supporting mortgage borrowers
across the UK.
The transaction is consistent with Group strategy and value
accretive to shareholders.
As previously indicated, the Group's strong free capital build
gives us flexibility to consider inorganic growth opportunities in
selected target areas where we see value for shareholders. The
transaction is in line with this approach and demonstrates the
Group's strong commitment to the strategically core prime mortgage
market.
The acquired portfolio will generate good returns to the Group
in excess of current organic market opportunities, while delivering
open mortgage book growth within the Group's low risk strategy and
providing additional flexibility in participation choices in the
mortgage market. Following this transaction, we now expect the
Group's open mortgage book assets at the year end to be ahead of
the year end 2018 balance.
The purchase price of c. GBP3.8 billion represents a 2.5 per
cent premium on gross book value. (2) It will be funded using
existing internal resources with minimal impact on capital (mid to
high single digits basis points at year end 2019). Under the
ownership of Tesco Bank the portfolio generated customer income of
c. GBP81 million and a pre-tax profit of c. GBP9 million in the
year to 28 February 2019.
The beneficial ownership of the portfolio is expected to
transfer at the end of September 2019, with transfer of legal title
anticipated by the end of March 2020. We will work closely together
with Tesco Bank to ensure a smooth transition to the Group for all
customers.
(1) Halifax is a division of Bank of Scotland plc which is a
wholly owned subsidiary of Lloyds Banking Group plc
(2) There will be an adjustment at legal close for in-flight
customer loans and further advances made to existing customers
during the period until legal title transfer which is likely to be
less than GBP30 million
- END -
For further information:
Investor Relations
Douglas Radcliffe +44 (0)20 7356 1571
Group Investor Relations Director
douglas.radcliffe@lloydsbanking.com
Corporate Affairs
Matt Smith +44 (0)20 7356 3522
Head of Corporate Media
matt.smith@lloydsbanking.com
FORWARD LOOKING STATEMENTS
This document contains certain forward looking statements with
respect to the business, strategy, plans and/or results of the
Group and its current goals and expectations relating to its future
financial condition and performance. Statements that are not
historical facts, including statements about the Group's or its
directors' and/or management's beliefs and expectations, are
forward looking statements. By their nature, forward looking
statements involve risk and uncertainty because they relate to
events and depend upon circumstances that will or may occur in the
future. Factors that could cause actual business, strategy, plans
and/or results (including but not limited to the payment of
dividends) to differ materially from forward looking statements
made by the Group or on its behalf include, but are not limited to:
general economic and business conditions in the UK and
internationally; market related trends and developments;
fluctuations in interest rates, inflation, exchange rates, stock
markets and currencies; any impact of the transition from IBORs to
alternative reference rates; the ability to access sufficient
sources of capital, liquidity and funding when required; changes to
the Group's credit ratings; the ability to derive cost savings and
other benefits including, but without limitation as a result of any
acquisitions, disposals and other strategic transactions; the
ability to achieve strategic objectives; changing customer
behaviour including consumer spending, saving and borrowing habits;
changes to borrower or counterparty credit quality; concentration
of financial exposure; management and monitoring of conduct risk;
instability in the global financial markets, including Eurozone
instability, instability as a result of uncertainty surrounding the
exit by the UK from the European Union (EU) and as a result of such
exit and the potential for other countries to exit the EU or the
Eurozone and the impact of any sovereign credit rating downgrade or
other sovereign financial issues; political instability including
as a result of any UK general election; technological changes and
risks to the security of IT and operational infrastructure,
systems, data and information resulting from increased threat of
cyber and other attacks; natural, pandemic and other disasters,
adverse weather and similar contingencies outside the Group's
control; inadequate or failed internal or external processes or
systems; acts of war, other acts of hostility, terrorist acts and
responses to those acts, geopolitical, pandemic or other such
events; risks relating to climate change; changes in laws,
regulations, practices and accounting standards or taxation,
including as a result of the exit by the UK from the EU, or a
further possible referendum on Scottish independence; changes to
regulatory capital or liquidity requirements and similar
contingencies outside the Group's control; the policies, decisions
and actions of governmental or regulatory authorities or courts in
the UK, the EU, the US or elsewhere including the implementation
and interpretation of key legislation and regulation together with
any resulting impact on the future structure of the Group; the
ability to attract and retain senior management and other employees
and meet its diversity objectives; actions or omissions by the
Group's directors, management or employees including industrial
action; changes to the Group's post-retirement defined benefit
scheme obligations; the extent of any future impairment charges or
write-downs caused by, but not limited to, depressed asset
valuations, market disruptions and illiquid markets; the value and
effectiveness of any credit protection purchased by the Group; the
inability to hedge certain risks economically; the adequacy of loss
reserves; the actions of competitors, including non-bank financial
services, lending companies and digital innovators and disruptive
technologies; and exposure to regulatory or competition scrutiny,
legal, regulatory or competition proceedings, investigations or
complaints. Please refer to the latest Annual Report on Form 20-F
filed with the US Securities and Exchange Commission for a
discussion of certain factors and risks together with examples of
forward looking statements. Except as required by any applicable
law or regulation, the forward looking statements contained in this
document are made as of today's date, and the Group expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward looking statements contained in
this document to reflect any change in the Group's expectations
with regard thereto or any change in events, conditions or
circumstances on which any such statement is based. The
information, statements and opinions contained in this document do
not constitute a public offer under any applicable law or an offer
to sell any securities or financial instruments or any advice or
recommendation with respect to such securities or financial
instruments.
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END
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September 03, 2019 02:16 ET (06:16 GMT)
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