Tesco considers £1bn bank flotation

2nd Nov 2014 15:23

Tesco is reportedly contemplating the £1bn sale of its banking arm to boost capital.The troubled retailer is currently being probed by the Serious Fraud Office for a £263m black hole in its profit margin.According to the Sunday Telegraph, sources now claim that to generate missing funds, the company may put Tesco Bank up for a partial flotation that could raise between £0.5bn and £1bn.Other options chief executive Dave Lewis is thought to be eyeing up include the sale of Tesco's Asian operations, its Blinkbox video-on-demand service and the group behind its Tesco's Clubcard service, Dunnhumby.However, retail experts have suggested that Blinkbox is unlikely to make any profit in a sale.The flotation of its banking arm would be favourable as it boasts six million customers and more than 4,000 members of staff.However, the worsening mood among investors has caused several high profile UK listings to be pulled in recent months, so an imminent listing for Tesco could prove challenging.Results from the company's personal finance arm results showed that bank profits fell by almost a quarter this year, dropping from £104.7m to £80m in the space of a year due to rising bad debts.