Tesco Bank has raised the sale sign on its mortgage portfolio and is to halt new lending, in a move that is likely to impact some 23,000 customers.

The bank, which has key operations in Edinburgh and Glasgow, said it was actively exploring options to sell its existing portfolio, which has total lending balances of £3.7 billion.

Gerry Mallon, the chief executive of Tesco Bank, said: “In recent years, challenging market conditions have limited profitable growth opportunities. Our focus is on how we best serve Tesco customers and align our resources effectively to their needs while ensuring that our offer remains sustainable in the long term.

“To that end, 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.”

The bank warned there was no certainty of a transaction.

The current Tesco bank mortgage customers may find themselves mortgage prisoners for some while and this is likely to affect their finances and general wellbeing.

John Bate

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.