Tesco Bank is stopping new mortgage lending and is looking for ways to sell its existing mortgage portfolio.
The bank, which started offering mortgages in 2012, has more than 23,000 mortgage customers, who have total lending balances of £3.7bn.
Tesco Bank chief Gerry Mallon said: "In recent years, challenging market conditions have limited profitable growth opportunities."
There will be no impact on customers who already have mortgages.
These will continue as normal for now, but if a sale does go ahead, then the bank will notify customers of any impact it will have on their accounts.
Any possible sale would include the transfer of related balances and the administration of relevant accounts.
Mr Mallon added: "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.
"Our priority in any sale, is to complete a commercially acceptable transaction with a purchaser who will continue to serve our customers well."
A number of supermarkets have moved into offering a range of financial services in recent times.
Some, including Tesco and Sainsbury's, were seen as potential challengers to the foothold of the major UK High Street banks - not least owing to the convenience they could offer.
However, strict regulation in the mortgage market, and the emergence of other app-based banks in the current account sector, has diluted this picture of supermarkets being as important in banking as they are in groceries.Where can you afford to live? Try our housing calculator to see where you could rent or buy This interactive content requires an internet connection and a modern browser. View affordability data by UK region View affordability data by local authority area Do you want to buy or rent? Buy Rent How many bedrooms? Use the buttons to increase or decrease the number of bedrooms: minimum one, maximum four. Alternatively, enter a number into the text input Decrease number of bedrooms Enter number of bedrooms 1 Increase number of bedrooms How much is your deposit? Enter your deposit below or adjust the deposit amount using the slider The national average is More about deposits Enter deposit amount £ Adjust deposit amount Info Return to 'How much is your deposit?' This calculator assumes you need a deposit of at least 5% of the value of the property to get a mortgage. The average deposit for UK first-time buyers is . How much can you pay monthly? Enter your monthly payment below or adjust the payment amount using the slider The national average is More about monthly payments Enter monthly payment amount £ Adjust monthly payment amount Info Return to 'How much can you pay monthly?' Your monthly payments are what you can afford to pay each month. Think about your monthly income and take off bills, council tax and living expenses. The average rent figure is for England and Wales. Your results - Amount of the United Kingdom that has housing you can afford Range of affordable areas includes: Armagh City, Banbridge and Craigavon and Belfast No affordable areas Explore the map in detail below Search the UK for more details about a local area Search for counties No data low (£) high (£££) Affordable Unaffordable What does affordable mean? You have a big enough deposit and your monthly payments are high enough. The prices are based on the local market. If there are 100 properties of the right size in an area and they are placed in price order with the cheapest first, the “low-end” of the market will be the 25th property, "mid-priced" is the 50th and "high-end” will be the 75th.