The bank confirmed that of its 136,000 current account holders, 40,000 had seen suspicious transactions over the weekend, while money had been fraudulently withdrawn from around 20,000 accounts.
A spokesman would not disclose the total amount that has been stolen from the accounts, adding that the incident is currently being treated as a “criminal investigation”.
“Tesco Bank can confirm that, over the weekend, some of its customer current accounts have been subject to online criminal activity, in some cases resulting in money being withdrawn fraudulently,” chief executive Benny Higgins said in a statement.
The bank has temporarily frozen online transactions as part of emergency security measures, and was earlier forced to block some customers’ cards after “suspicious activity” was detected in its fraud prevention system.
Mr Higgins issued an apology to customers and said the bank would refund accounts as soon as possible.
“We apologise for the worry and inconvenience that this has caused for customers, and can only stress that we are taking every step to protect our customers’ accounts.
“We can reassure customers that any financial loss as a result of this activity will be resolved fully by Tesco Bank, and we are working to refund accounts that have been subject to fraud as soon as possible,” he said.
The news sent Tesco shares lower by 1.2% in early trading.