...September 3, 2019 LONDON (S&P Global Ratings) Sept. 3, 2019--S&P Global Ratings views Lloyds Banking Group's acquisition of Tesco Personal Finance's U.K. prime residential mortgage portfolio as a modest, bolt-on transaction. Tesco announced in May 2019 that it would cease mortgage lending and explore the sale of its outstanding portfolio. We see Lloyds as an obvious acquirer given it is the mortgage market leader and has a track record of targeted, value-accretive transactions, such as MBNA's U.K. credit card book and Zurich's U.K. workplace pensions business. The ú3.7 billion acquired portfolio is small in the context of Lloyds' ú264.9 billion open mortgage book at June 30, 2019, which represented a 19% market share. Nevertheless, it should help Lloyds manage its asset growth and net interest margin during the current strong price competition in the U.K. mortgage market. The risk profile of the acquired portfolio appears similar to Lloyds' existing assets. For example, Tesco reported that...
