RBS sells Tesco Personal Finance

Royal Bank of Scotland (RBS) has sold its 50 per cent stake in Tesco Personal Finance (TPF) to the supermarket.

The deal worth £950 million sees Tesco take control of the division offering insurance, savings and loans.

The supermarket now aims to increase profits from £240 million this year to £1 billion, while RBS will still provide financial services to Tesco.

Sir Terry Leahy, Tesco chief executive, said: "Services are bigger and faster-growing markets than food. As consumers look to make every pound work harder, it is a good time for Tesco to expand its presence.

"We have become a trusted supplier of innovative products and services offering great value and I believe Tesco's special relationship with consumers will enable TPF, as a wholly owned subsidiary of Tesco, to move its business to the next level."

TPF was established in 1997 as a joint venture between Tesco and RBS and now has 5.5 million customer accounts and offers more than 25 different products.

Sixty per cent of its sales are now online.

Daniel Barnes