Tesco takes brand strength to banking |
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| Economy | |
| Written by Gary Howes | |
| Monday, 30 March 2009 | |
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As a trusted brand analysts believe Tesco could be a major player on the high street in the future.
Tesco (LON:TSCO) plans to open 30 bank branches in its stores by the end of 2009 as it expands its personal finance brand. The announcement marks a significant moment in the UK financial industry as some analysts believed the leverage the Tesco brand offers could see Tesco become one of the main high street banks in the future. Adrian Lowcock, Senior Investment Adviser at Bestinvest says, "as banks are finding it difficult to fulfill their traditional roles as lenders it is no surprise to see Tesco continue to expand its financial operations. It has customer confidence and is a trusted name that is the envy of many banks at present." "It may be only a matter of time before Tesco becomes one of the main high street banks, however, there is a lot of work to do and success is by no means guaranteed. So far they have taken small steps, an approach that seems to be working," Lowcock says. The news comes as a survey shows that jobs in financial services are being cut at the fastest rate since 1993. A balance of 40% more companies reported a fall in staff numbers than a rise, in figures covering the three months to the beginning of March from the employers' group, the CBI. Tesco set up its financial services division as a joint venture with Royal Bank of Scotland 11 years ago. It bought RBS' stake for £950m in July 2008. Tesco announced earlier 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. It also announced plans to recruit more than 200 staff to work in the Edinburgh headquarters of its personal finance arm.
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