In a £600 million deal, Barclays has agreed to acquire the majority of Tesco’s banking business, along with around 2,800 staff, following regulatory approval.

Barclays announced on Friday its intention to take over Tesco Bank’s credit cards and unsecured personal loans, encompassing approximately £8.3 billion in lending balances.

Additionally, a 10-year distribution agreement has been established, allowing Barclays to sell financial products under the Tesco brand. Under this arrangement, Tesco, the largest supermarket in the UK, will retain its insurance, ATMs, travel money, and gift card operations, which it characterises as “capital-light, profitable businesses with a strong connection to our core retail offer.”

In a piece on its news site, Barclays said that “Tesco’s retail banking customer base is broadly similar to Barclays UK’s existing customers and will complement our current business, as well as build on our existing UK strategic partnerships with other leading retail, consumer electronics and loyalty programme brands.”

C.S. Venkatakrishnan, group chief executive of Barclays, commented: “This strategic relationship with the UK’s largest retailer will help create new distribution channels for our unsecured lending and deposit businesses. We are able to bring our expertise in partnership cards developed over decades in the US to enhance further the highly successful Tesco Clubcard loyalty scheme.

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“This partnership with Tesco is a further demonstration of the investment we continue to make in our UK consumer business. We are looking forward to working closely with the team at Tesco over the coming months to enable a smooth transition and, subject to completion of the transaction, we look forward to welcoming Tesco Bank colleagues and customers to Barclays.”

This follows the news in late January that retail giant Sainsbury’s will close its Edinburgh-based banking division, with an operational update also stating that chief executive Jim Brown will retire, to be replaced by former head of Allied Irish Bank’s UK division, Robert Mulhall, in March.