Tesco Bank to pull out of mortgage market

Tesco Bank is stopping new mortgage lending and is looking for ways to sell its existing mortgage portfolio.

The bank, which started offering mortgages in 2012, has more than 23,000 mortgage customers, who have total lending balances of £3.7bn.

Tesco Bank chief Gerry Mallon said: "In recent years, challenging market conditions have limited profitable growth opportunities."

There will be no impact on customers who already have mortgages.

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These will continue as normal for now, but if a sale does go ahead, then the bank will notify customers of any impact it will have on their accounts.

Any possible sale would include the transfer of related balances and the administration of relevant accounts.

Mr Mallon added: "We have made the strategic decision to focus on serving a broader range of customers in more specific areas, which means moving away from our mortgage offer.

"Our priority in any sale, is to complete a commercially acceptable transaction with a purchaser who will continue to serve our customers well."

A number of supermarkets have moved into offering a range of financial services in recent times.

Some, including Tesco and Sainsbury's, were seen as potential challengers to the foothold of the major UK High Street banks - not least owing to the convenience they could offer.

However, strict regulation in the mortgage market, and the emergence of other app-based banks in the current account sector, has diluted this picture of supermarkets being as important in banking as they are in groceries.