The Telegraph reports that the company is in the early stages of examining a potential partial float of Tesco Bank, which could raise between £500m and £1bn.
Estimates from HSBC analysts have put the cost of turning the company around at up to £3bn, with the partial sale of Tesco Bank shares seen as an attractive option.
The company is in the midst of a major crisis following the discovery last month of accounting irregularities that have since led to £263m in profits being written-off.
An FCA investigation has been put on hold following the announcement last week that the Serious Fraud Office is launching a criminal investigation into the affair.
Alongside the bank, options include the sale of Tesco’s Asian businesses, valued at between £8bn and £10bn, or the disposal of Dunhummby, which runs the supermarket’s Clubcard division and has reportedly received interest from the private equity sector. A sale of Tesco’s failed Blinkbox video streaming service is also under way.
Tesco Bank, which has around 4,000 staff and some 6m customers, is wholly owned by the supermarket firm, after the company paid £1bn to buy out joint partner Royal Bank of Scotland in 2008.
However, a listing in the coming months could prove challenging after a string of UK listings were pulled in the face of worsening investor sentiment, while Tesco Bank’s own performance has been disappointing. Tesco's half-year results revealed that profits at the bank had fallen by nearly a quarter to £80m this year from £104.7m the previous year on the back of rising bad debts.
A recent decline in global equity markets forced challenger bank Aldermore to cancel a stockmarket flotation scheduled for last month, while Virgin Money has also delayed a planned listing.
