LONDON, Sept 3 (Reuters) - Lloyds Banking Group has agreed to buy Tesco Bank’s 3.7 billion pounds ($4.54 billion) UK residential mortgage portfolio, in a move likely to consolidate its dominance of Britain’s ultra-competitive market for home loans.
Lloyds’ subsidiary Halifax will pay a purchase price of around 3.8 billion pounds, representing a 2.5% premium on the gross book value and will be funded using existing internal resources, the lender said.
Under the ownership of Tesco Bank, the portfolio, which comprises over 23,000 mortgage customers, generated income of around 81 million pounds and a pre-tax profit of around 9 million pounds in the year to February 28.
The ownership of the portfolio is expected to transfer at end of September, with transfer of the legal title anticipated by end of March 2020. ($1 = 0.8145 pounds) (Reporting by Abhinav Ramnarayan, editing by Sinead Cruise)