Tesco has announced that it is expanding its retail banking unit with plans to hire more than 800 staff in Glasgow, as part of the group’s wider effort to create a full-service bank. Due to open in the first half of next year, the new Glasgow unit will manage customer sales and service for Tesco Personal Finance, the retail banking division. Its operations include providing loans, credit cards and savings accounts.

Andrew Higginson, chief executive of Tesco Retailing Services, said the new customer service centre is a "significant step towards TPF offering a full banking service." The supermarket is hoping to capitalise on the decline of people's faith in traditional banks in the wake of the credit crisis with Higginson saying, “It is hard to ignore that people's trust in the banking sector is at a very low ebb.”

Alistair Darling, the Chancellor, who is scheduled to visit Tesco Personal Finance's Edinburgh base today said, “I want to see increased competition in the (banking) system and that’s why Tesco’s announcement today is important

“We do need more competition in the system. The last couple of years has seen a significant reduction in the number of people, both from abroad and British-based banks, who are lending into the market. We need more competition and that’s something that we intend to encourage.”

Tesco bought out RBS’s 50% stake in Tesco Personal Finance, the joint venture between the bank and the supermarket, last year. The group is considering expanding its presence in banking by tapping the wholesale credit markets and has been mooted in the City and in the press as a possible buyer of Northern Rock.

NamNews - Thursday 20th August 2009

 

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