Tesco plans to expand its financial operations by opening bank branches in 30 of its stores by the end of 2009. It has already trialed a branch in Glasgow since 2006 which it says has been well received and new branches will open next month in Blackpool, Coventry and Bristol.
Tesco set up its financial services division as a joint venture with Royal Bank of Scotland 11 years ago but bought RBS' stake for £950 million in July 2008.
It currently offers insurance, credit cards, loans and savings accounts and is keen to start offering current accounts within the next two years.
A recent survey shows that jobs in financial services are being cut at the fastest rate since 1993. However Tesco says the amount of money deposited in its savings accounts had nearly doubled over six months, with more accounts opened in December 2008 than in all of 2007and it plans to add more than 200 workers to staff the personal finance headquarters in Edinburgh.
DebtWizard Comment
The decision to expand into the banking sector comes at a time when public confidence in the banking sector is probably at an all time low. Perhaps it is not surprising though that Tesco, with their well known brand image, is happy to develop its business in this direction, signalling a more traditional banking approach to its customers.