Brit Grocer To Become Major Banking Player
While British retailer Tesco has been offering financial products for several years now, the Financial Times believes that the grocer is about to become a serious threat to UK banks. With 6m bank accounts and £4.5bn in deposit accounts the paper believes that they can easily leverage the public’s distrust of established financial institutions and launch into checking accounts and home loans:
Tesco declared its ambitions to become the “people’s bank” yesterday, capitalising on public disillusionment with traditional lenders to launch an aggressive expansion into financial services.
…Tesco is planning to open 30 bank branches in its stores this year and to broaden its range of financial products. It aims to start offering current accounts to customers within 18 months and may also move into the mortgage market in the longer term.
Sir Terry said that the crisis engulfing Britain’s financial services industry had played into Tesco’s hands.
He added that Tesco’s retailing services division – which is made up of Tesco.com, Tesco Telecoms and Tesco Personal Finance – could be making £1bn of profits within a decade, against its current profits of just under £400m.