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Banking giant Barclays has agreed to buy the retail banking business of Tesco Bank, the companies have announced.

The ‘Big Four’ banker expects to pay around £600m for Tesco Bank’s credit cards, unsecured personal loans, deposits and operating systems. It will also take on its 2,800 staff in offices in Glasgow, Newcastle, Edinburgh and Reigate.

The deal is subject to regulatory approval but Barclays said it expected to complete it in the second half of 2024, at which point it would transfer Tesco Bank’s 2,800 employees to its teams. The two firms have agreed a partnership, which will initially run for a 10-year period, under which Barclays will market Tesco-branded banking services that will include credit cards, personal loans and deposits.

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Tesco said the partnership would help it to reduce debts and focus on its core retail business.

Ken Murphy, Tesco chief executive, said: “Tesco Bank is a strong business that has helped millions of loyal customers to manage their money for more than 25 years. As we look to the future, our aim is to be the best provider of financial services in the º£½ÇÊÓƵ, with this strategic transaction and partnership with Barclays unlocking greater value for customers and for our business.”

CS Venkatakrishnan, Barclays group chief executive, said: “This strategic relationship with the º£½ÇÊÓƵ’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.

“This partnership with Tesco is a further demonstration of the investment we continue to make in our º£½ÇÊÓƵ 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.”