This includes the complete transfer of related balances and ongoing administration of relevant accounts.
Tesco Bank has ceased new mortgage lending and is actively exploring options to sell its existing mortgage portfolio.
This includes the complete transfer of related balances and ongoing administration of relevant accounts.
The bank, which has offered mortgages since 2012, currently serves over 23,000 customers with total lending balances of £3.7bn.
Gerry Mallon, chief executive at 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.
“We have therefore chosen to cease lending to new customers and announce our intention to explore a sale of our portfolio. Our priority in any sale, is to complete a commercially acceptable transaction with a purchaser who will continue to serve our customers well.”
Andrew Montlake, director of mortgage broker, Coreco, added: "With transaction levels painfully low, the mortgage market has never been as competitive as it is right now.
“Margins are being squeezed as rates race to the bottom in a bid for market share and Tesco appear to be saying that the numbers no longer stack up for them. Diminished margins against a backdrop of extreme political and economic uncertainty have resulted in Tesco calling it a day.
“It’s a small blow to consumer choice but thankfully there are lenders aplenty that are financially strong and keen to get money into the market. It is difficult for challenger banks to maintain this level of competitiveness for so long and to make inroads into the market.
“Lenders have to maintain a margin but at the same time they also need to maintain a responsible level of underwriting and risk. The positive is that this is not a knee-jerk reaction but appears a reasoned and strategic withdrawal from the market."
If a transaction is confirmed, Tesco Bank will notify existing customers to explain what the sale means for their account.
The lender said there are no changes to customer accounts as a result of this announcement and customers do not need to take any action.
