UK supermarket chain Tesco plans to open 30 bank branches in its stores by the end of 2009 as it looks to cash in on consumer mistrust of traditional banks and extend its presence in financial services. The company announced in March that the amount of money deposited in its savings accounts had nearly doubled over the past six months, with more accounts opened in December 2008 than in the whole of 2007.
The move by the retailing giant comes as public anger spills over about the hundreds of million of pounds paid out in bonuses to bankers this year despite several of the biggest banks, including Lloyds and Royal Bank of Scotland, being saved from collapse by taxpayer-funded bailouts.
Tesco - which bought out the Royal Bank of Scotland to take complete control of Tesco Personal Finance in December - has been running a trial of the concept branch in Glasgow since 2006. The first new branches will open next month in Blackpool, Coventry and Bristol.
Each branch will offer credit cards, savings accounts and insurance via its Tesco Personal Finance (TPF) brand. Late last year they announced that they could be offering mortgages later this year and they hope to be able to offer standard current account products within the next 18 months. Customers will also be able to gain Clubcard loyalty points through using the bank.
Andy Higginson, chief executive of Tesco Retailing Services, says the supermarket bank will be "old-fashioned and conservative".
Resurrecting old-fashioned banking has to be good news for consumers. Banks used to specialise in building up personal relationships with their customers. Now when you phone your 'local branch' your query tends to be channeled to a call centre in India where you are simply an account number.
Will Tesco Bank become a direct competitor to the likes of HSBC and Barclays? Only time will tell. Are you one of the growing number of people dissatisfied with the performance and service of the high street banks? What would encourage you to do your banking along with the weekly shop?
Leave a comment